Habas Sinai Ve Tibbi Gazlar Istihsal Endüstrisi v. United States

• Decision Date: 17 October 2019
• Docket Number: Consol. Court No. 17-00204,Slip Op. 19-130
• 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

415 F.Supp.3d 1195

HABAS SINAI VE TIBBI GAZLAR ISTIHSAL ENDÜSTRISI, A.S., Plaintiff,andIcdas Celik Enerji Tersane Ve Ulasim Sanayi, A.S., Consolidated Plaintiff,

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

Slip Op. 19-130

Consol. Court No. 17-00204

United States Court of International Trade.

October 17, 2019

David L. Simon, Law Office of David L. Simon, of Washington, DC, for Plaintiff Habas Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.S.

Matthew M. Nolan and Leah N. Scarpelli, Arent Fox, LLP, of Washington, DC, for Consolidated Plaintiff Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S.

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

Alan H. Price, John R. Shane, and Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, for Defendant-Intervenor Rebar Trade Action Coalition.

OPINION AND ORDER

Barnett, Judge:

This matter is before the court following the U.S. Department of Commerce's ("Commerce" or "the agency") redetermination upon court-ordered remand. See Final Results of Redetermination Pursuant to Court Remand ("Remand Results"), ECF No. 70-1. Plaintiff Habas Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.S. ("Habas") and Consolidated Plaintiff Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. ("Icdas") (together, "Plaintiffs") each challenged certain aspects of Commerce's 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. The court previously sustained Commerce's refusal to employ a quarterly cost-averaging methodology for either Plaintiff; selection of the invoice date as the date of sale for Habas's U.S. sales; and rejection of Habas's zero-interest short-term loans to calculate imputed credit expenses. See Habas Sinai ve Tibbi Gazlar Istihsal Endüstrisi, A.S. v. United States ("Habas I "), 43 CIT ––––, ––––, 361 F. Supp. 3d 1314, 1317-18 (2019).² The court remanded Commerce's calculation of Plaintiffs' respective duty drawback adjustments and the use of partial adverse facts available in relation to certain sales for which Icdas could not provide manufacturer codes. Id.

On May 17, 2019, Commerce filed its Remand Results. Therein, Commerce revised its method of calculating Plaintiffs' 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; and Commerce also provided additional reasoning to support its use of partial adverse facts available with respect to Icdas. Remand Results at 1-2, 7-20, 33-41, 44-45. The changes made by Commerce reduced Habas's weighted-average dumping margin from 5.39 percent to 4.98 percent and Icdas's from 9.06 percent to 8.66 percent. Remand Results at 21.

Habas and Icdas filed comments opposing Commerce's use of a COS adjustment. Comments of PI. Habas Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.S. on Redetermination on Remand ("Habas's Cmts.") at 2-10, ECF No. 74; PI. Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S.'s Comments on Remand Redetermination ("Icdas's Cmts.") at 3-13, ECF No. 75. Icdas continues to challenge Commerce's use of partial adverse facts available. Icdas's Cmts. at 13-14. Defendant United States ("the Government") and Defendant-lntervenor Rebar Trade Action Coalition ("RTAC") filed comments in support of the Remand Results. Def.'s Resp. to Pls.' Comments on the Remand Redetermination ("Gov't's Reply Cmts."), ECF No. 76; Rebar Trade Action Coalition's Resp. to Comments on Final Results of Redetermination ("RTAC's Reply Cmts."), ECF No. 77.

For the reasons discussed herein, the court sustains Commerce's duty drawback adjustment as applied to export price, remands Commerce's decision to make a COS adjustment in the same amount, and sustains Commerce's use of partial adverse facts available with respect to Icdas.

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),³ 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). "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 Habas I

To determine whether the subject merchandise is being sold at less than fair value, Commerce compares the export price or constructed export price⁴ 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 C.I.T. 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 ; see also Remand Results at 7.

"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." Habas I , 361 F. Supp. 3d at 1320. When producers were exempt⁵ from the payment of import duties, Commerce also increased cost of production and constructed value⁶ to account for the cost of the exempted duties for which the producer remained liable until the exemption program requirements were satisfied. Habas I , 361 F. Supp. 3d at 1320 ; see also Saha Thai , 635 F.3d at 1341-44 (affirming the upward adjustment to cost of production). In 2016, Commerce modified its duty drawback adjustment "by allocating exempted duties over total production rather than exports." Habas I , 361 F. Supp. 3d at 1320. Commerce adjusted its methodology in response to assertions that margin distortions arose when foreign producers "use[d] fungible inputs both from foreign sources, which incur[red] import duties, and domestic sources, which [did] not." Id. Commerce reasoned that "the larger denominator on the cost-side [i.e., total production] resulted in a smaller adjustment to normal value than U.S. price"; consequently, it determined that "equalizing the denominators used in each adjustment" ensured that an equal amount would be added to U.S. price and normal value and the agency would compare the two values on a "duty neutral" basis. Id. at 1320-21.

In the administrative proceeding underlying Habas I , Commerce used this modified duty drawback methodology to calculate the adjustment to U.S. price and make a corresponding equal upward adjustment on the cost side pursuant to Saha Thai . See l & D Mem. at 12-13 & n.50. The court remanded the duty drawback adjustment to U.S. price—specifically, Commerce's allocation of the exempted duties over total production—as "inconsistent with the clear statutory linkage between [the foregone] duties and exported merchandise." Habas I , 361 F. Supp. 3d at 1322 (collecting cases reaching the same conclusion). The court reasoned that "Congress ... clearly intended the adjustment to capture the amount of duties Plaintiffs would have paid on their export sales but for the exportation of that merchandise"; thus, "[a]llocating Plaintiffs' exempted duties over total production" contravened " section 1677a(c)(1)(B) because it attributes some of the [duty] drawback to domestic sales, which do not earn drawback, and fails to adjust export price by the amount of the import duties exempted by reason of exportation."

Id. at 1323 (internal quotation marks and citation omitted). The...