Habas Sinai Ve Tibbi Gazlar Istihsal v. United States

• Decision Date: 23 January 2019
• Docket Number: Consol. Court No. 17-00204,Slip Op. 19-10
• Citation: 361 F.Supp.3d 1314
• Parties: HABAS SINAI VE TIBBI GAZLAR ISTIHSAL ENDÜSTRISI, A.S., Plaintiff, and Icdas Celik Enerji Tersane ve Ulasim Sanayi, A.S., Consolidated Plaintiff, v. UNITED STATES, Defendant, and Rebar Trade Action Coalition, Defendant-Intervenor.
• Court: U.S. Court of International Trade

361 F.Supp.3d 1314

HABAS SINAI VE TIBBI GAZLAR ISTIHSAL ENDÜSTRISI, A.S., Plaintiff,

and

Icdas Celik Enerji Tersane ve Ulasim Sanayi, A.S., Consolidated Plaintiff,

v.UNITED STATES, Defendant,andRebar Trade Action Coalition, Defendant-Intervenor.

Slip Op. 19-10

Consol. Court No. 17-00204

United States Court of International Trade.

Dated: January 23, 2019

David L. Simon, Law Office of David L. Simon, of Washington, DC, argued for Plaintiff.

Nancy Noonan, Arent Fox, LLP, of Washington, DC, argued for Consolidated Plaintiff. With her on the brief were Matthew M. Nolan and Leah N. Scarpelli.

Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Chad A. Readier, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief was David W. Richardson, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

John R. Shane and Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, argued for Defendant-Intervenor. With them on the brief was Alan H. Price.

OPINION AND ORDER

Barnett, Judge:

Plaintiff Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. ("Habas") and Consolidated Plaintiff Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. ("Icdas") (together, "Plaintiffs") challenge the U.S. Department of Commerce's ("Commerce" or the "agency") final affirmative determination in the sales at less than fair value investigation of steel concrete reinforcing bar ("rebar") from the Republic of Turkey ("Turkey").¹ See Steel Concrete Reinforcing Bar From the Republic of Turkey, 82 Fed. Reg. 23,192 (Dep't Commerce May 22, 2017) (final determination of sales at less than fair value) ("Final Determination"), ECF No. 17-5, as amended by Steel Concrete Reinforcing Bar From the Republic of Turkey and Japan, 82 Fed. Reg. 32,532 (Dep't Commerce July 14, 2017) (am. final affirmative antidumping duty determination for the Republic of Turkey and antidumping duty orders) ("Am. Final Determination "), ECF No. 17-7, and accompanying Issues and Decision Mem., A-489-829 (May 15, 2017) ("I & D Mem."), ECF No. 17-6.

Plaintiffs challenge several aspects of the Final Determination.² See Confidential Pl.'s Rule 56.2 Mot. for J. on the Agency R. and Mem. in Supp. of Mot. of Pl. Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S., for J. on the Agency R. Pursuant to Rule 56.2 ("Habas's Mem."), ECF No. 22; Confidential Mot. for J. on the Agency R., ECF No. 24, and Confidential Pl. Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S.'s Mem. of Law in Supp. of Mot. for J. on the Agency R. Pursuant to Rule 56.2 ("Icdas's Mem."), ECF No. 29. Habas and Icdas challenge Commerce's calculation of their respective duty drawback adjustments and refusal to use a quarterly cost-averaging methodology in the determination of normal value. See Habas's Mem. at 4-25; Icdas's Mem. at 9-31. Habas challenges Commerce's selection of the invoice date as the date of sale for its U.S. sales and rejection of its zero-interest short-term loans to calculate imputed credit expenses. Habas's Mem. at 25-39. Icdas challenges Commerce's use of partial adverse facts available in relation to certain sales for which it could not provide manufacturer codes. Icdas's Mem. at 31-36.³ Defendant United States ("Defendant" or the "Government") and Defendant-Intervenor Rebar Trade Action Coalition ("Defendant-Intervenor" or "RTAC") urge the court to sustain Commerce's Final Determinationin full. See Confidential Def.'s Resp. to Pls.' Mots. for J. Upon the Agency R. ("Def.'s Resp."), ECF No. 37; Confidential Resp. Br. of Def.-Int. Rebar Trade Action Coalition ("Def.-Int.'s Resp."), ECF No. 40.

For the reasons discussed herein, the court remands Commerce's calculation of Plaintiffs' duty drawback adjustment and application of partial adverse facts available to Icdas. The court sustains the Final Determination in all other respects.

BACKGROUND

On October 18, 2016, Commerce initiated this antidumping duty investigation of rebar from Turkey in response to a petition filed by RTAC and the domestic rebar producers that constitute RTAC's individual members. See Steel Concrete Reinforcing Bar From Japan, Taiwan and the Republic of Turkey, 81 Fed. Reg. 71,697 (Dep't Commerce Oct. 18, 2016) (initiation of less-than-fair-value investigations), PR 28, PJA Tab 1. Commerce selected Habas and Icdas as mandatory respondents in the investigation. I & D Mem. at 1. The period of investigation ("POI") ran from July 1, 2015 to June 30, 2016. Final Determination, 82 Fed. Reg. at 23,192.

On March 7, 2017, Commerce issued its preliminary determination. See Steel Concrete Reinforcing Bar From the Republic of Turkey, 82 Fed. Reg. 12,791 (Dep't Commerce Mar. 7, 2017)("Prelim. Determination"), and accompanying Prelim. Decision Mem., A-489-829 (Feb. 28, 2017) ("Prelim. Mem."), PR 161, PJA Tab 30. Commerce preliminarily calculated a weighted-average dumping margin of 5.29 percent for Habas and 7.07 percent for Icdas. Prelim. Determination, 82 Fed. Reg. at 12,792.

On May 22, 2017, Commerce issued the Final Determination. 82 Fed. Reg. at 23,192. Commerce issued an amended final determination on July 14, 2017. See Am. Final Determination, 82 Fed. Reg. at 32,532. Therein, Commerce calculated a weighted-average dumping margin of 5.39 percent for Habas and 9.06 percent for Icdas. Id., 82 Fed. Reg. at 32,533.

On July 31, 2017, Habas timely commenced this action. See Summons, ECF No. 1. On August 11, 2017, Icdas timely commenced a separate action also challenging the Final Determination. See Summons, ECF No. 1 (Court No. 17-00218). On October 5, 2017, the court consolidated the two actions under lead Court No. 17-00204. See Order (Oct. 5, 2017), ECF No. 15. The court heard oral argument on November 29, 2018. See Docket Entry, ECF No. 58.⁴

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) (2012). 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). "Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ " Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Substantial evidence "requires more than a mere scintilla," but "less than the weight of the evidence." Nucor Corp. v. United States, 34 CIT 70, 72, 675 F.Supp.2d 1340, 1345 (2010). The court may not "reweigh the evidence or ... reconsider questions of fact anew." Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1377 (Fed. Cir. 2015).

DISCUSSION

I. Duty Drawback

A. Background

To determine whether the subject merchandise is being sold at less than fair value, Commerce compares the export price ("EP") or constructed export price ("CEP")⁶ of the subject merchandise to its normal value ("NV"). See generally 19 U.S.C. § 1673 et seq. Generally, an antidumping duty is the amount by which the normal value of a product—generally, 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 will 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 duty drawback adjustment is intended to prevent the dumping margin from being increased by import taxes that are imposed on raw materials used to produce subject merchandise, but which 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 producers are subject to the import duty when merchandise is sold in the home market, "which increases home market sales prices and thereby increases [normal value]." Saha Thai, 635 F.3d at 1338. The statute increases constructed export price "to the level it likely would be absent the duty drawback" to prevent the absence of import duties from generating or increasing any dumping margin. Id.

Commerce has developed a two-prong test to determine whether a respondent is entitled to a duty drawback adjustment: first, "that the exemption [from import duties] is linked to the exportation of subject merchandise"; and second, "that there [were] sufficient imports of the raw material to account for the duty drawback on the export of subject merchandise." I & D Mem. at 12; see also Saha Thai, 635 F.3d at 1340 (affirming the lawfulness of Commerce's two-prong test).

Commerce determined that Plaintiffs had demonstrated their entitlement to the duty drawback adjustment. I & D Mem. at 12.⁷ At issue, however, is Commerce's method of calculating the adjustment.

Until recently, Commerce calculated the duty drawback adjustment to U.S. price (referred to as the sales-side adjustment) by dividing rebated or exempted duties by total exports and adding the resultant per unit duty burden to the export price. See Rebar Trade Action Coalition v. United States ("RTAC I "), Slip Op. 15-130, 2015 WL 7573326, at *4 (CIT Nov. 23, 2015) (granting Commerce's request for a voluntary remand to reconsider the sales-side adjustment methodology...