Ntn Bearing Corp. of America v. U.S.

• Decision Date: 24 January 2002
• Docket Number: Slip Op. 02-07.,Court No. 98-01-00146.
• Citation: 186 F.Supp.2d 1257
• Parties: NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation; NSK Ltd. and NSK Corporation; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A., Plaintiffs and Defendant-Intervenors, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor and Plaintiff.
• Court: U.S. Court of International Trade

186 F.Supp.2d 1257

NTN BEARING CORPORATION OF AMERICA, American NTN Bearing Manufacturing Corporation and NTN Corporation; NSK Ltd. and NSK Corporation; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A., Plaintiffs and Defendant-Intervenors, v. UNITED STATES, Defendant, and The Timken Company, Defendant-Intervenor and Plaintiff.

Slip Op. 02-07.

Court No. 98-01-00146.

United States Court of International Trade.

January 24, 2002.

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Barnes, Richardson & Colburn (Donald J. Unger, Kazumune V. Kano, David G. Forgue and Clarice K.M. McCauley), Chicago, IL, for NTN.

Lipstein, Jaffe & Lawson, L.L.P. (Robert A. Lipstein, Matthew P. Jaffe and Grace W. Lawson), Washington, DC, for NSK.

Powell, Goldstein, Frazer & Murphy LLP (Peter O. Suchman, Neil R. Ellis, Elizabeth C. Hafner and Ronald E. Minsk), Washington, DC, for Koyo.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Velta A. Melnbrencis, Assistant Director, and Michele D. Lynch); of counsel: Joan L. Mackenzie and Barbara Campbell Potter, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Washington, DC, for the United States.

Stewart and Stewart (Terence P. Stewart, William A. Fennell and Patrick J. McDonough), Washington, DC, for Timken.

OPINION

TSOUCALAS, Senior Judge.

Plaintiffs and defendant-intervenors, NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation and NTN Corporation (collectively "NTN"), NSK Ltd. and NSK Corporation (collectively "NSK"), and Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (collectively "Koyo"), move pursuant to USCIT R. 56.2 for judgment upon the agency record challenging various aspects of the Department of Commerce, International Trade Administration's ("Commerce") final determination, entitled Final Results of Antidumping Duty Administrative Reviews of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan ("Final Results"), 63 Fed.Reg. 2558 (Jan. 15, 1998), as amended, Amended Final Results of Antidumping Duty Administrative Reviews of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan ("Amended Final Results"), 63 Fed.Reg. 13,391 (Mar. 19, 1998). Defendant-intervenor and plaintiff, The Timken Company ("Timken"), also moves pursuant to USCIT R. 56.2 for judgment upon the agency record challenging certain determinations of Commerce's Final Results.

Specifically, NTN contends that Commerce unlawfully: (1) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) (1994) for the 1976 antidumping duty order; (2) denied a price-based level of trade ("LOT") adjustment for NTN's constructed export price ("CEP") sales; (3) rejected NTN's allocation of United States and home market selling expenses on an LOT-specific basis; (4) refused to calculate CEP profit on an LOT-specific basis; (5) included export price ("EP") sales in the calculation of CEP profit; (6) recalculated NTN's credit expenses on a transaction-specific basis; (7) denied a downward adjustment to NTN's reported United States indirect selling expenses for imputed interests incurred in financing cash deposits for antidumping duties; (8) adjusted NTN's cost of production ("COP") and constructed value ("CV") for affiliated party inputs; (9) applied a 99.5% test to determine whether sales to NTN's affiliated parties were made at arm's length; (10) double-counted NTN's depreciation of idle equipment; (11) included its zero-priced United States transactions in the margin calculations and failed to exclude NTN's sample sales and other sales from its margin calculation; and (12) used facts available to adjust NTN's reported billing adjustment.

NSK contends that Commerce unlawfully: (1) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) for the 1976 and 1987 antidumping duty orders; (2) used NSK's affiliated supplier cost data to run its model match methodology under 19 U.S.C. § 1677(16) (1994), to calculate the difmer adjustment under 19 U.S.C. § 1677b(a)(6) (1994) and to recalculate NSK's reported U.S. inventory carrying costs ("ICC") prior to deducting this expense from CEP pursuant to 19 U.S.C. § 1677a(d) (1994); and (3) denied a partial LOT adjustment.

Koyo contends that Commerce unlawfully: (1) conducted a duty absorption inquiry under 19 U.S.C. § 1675(a)(4) for the 1976 and 1987 antidumping duty orders; (2) applied adverse facts available to Koyo's sales of further manufactured tapered roller bearings ("TRBs"); (3) used entered value to calculate the assessment rate under 19 C.F.R. § 351.212(b) (1998); and (4) treated Koyo's imported forged rings as in-scope merchandise subject to the TRB antidumping duty order.

Timken contends that Commerce unlawfully: (1) applied adverse facts available to Koyo's entered value; (2) failed to adjust CEP for indirect selling expenses reported by NTN, NSK and Koyo; (3) permitted NTN to exclude certain warehousing expenses attributable to non-scope merchandise from its reported United States indirect selling expenses; (4) accepted Koyo's home market support rebates; (5) accepted Koyo's home market "billing adjustment two"; (6) accepted NSK's home market lump-sum rebates; and (7)accepted Koyo's home market average short-term interest rate.

BACKGROUND

This case concerns the 1976 and 1987 antidumping duty orders on TRBs from Japan for the period of review ("POR") covering October 1, 1995, through September 30, 1996. On September 9, 1997, Commerce published the preliminary results of administrative reviews of the 1976 and 1987 antidumping duty orders. See Preliminary Results of Antidumping Duty Administrative Reviews of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan, ("Preliminary Results") 62 Fed.Reg. 47,452. Commerce published the Final Results on January 15, 1998, see 63 Fed.Reg. at 2558, and the Amended Final Results on March 19, 1998, see 63 Fed.Reg. 13,391.¹

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 1516a(a) (1994) and 28 U.S.C. § 1581(c) (1994).

STANDARD OF REVIEW

The Court will uphold Commerce's final determination in an antidumping administrative review 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)(i) (1994); see NTN Bearing Corp. of Am. v. United States ("NTN Bearing"), 24 CIT ___, ___, 104 F.Supp.2d 110, 115-16 (2000) (detailing Court's standard of review for antidumping proceedings).

DISCUSSION

I. Commerce's Duty Absorption Inquiry

A. Background

Title 19, United States Code, § 1675(a)(4) provides that during an administrative review initiated two or four years after the publication of an antidumping duty order, Commerce, if requested by a domestic interested party, "shall determine whether antidumping duties have been absorbed by a foreign producer or exporter subject to the order if the subject merchandise is sold in the United States through an importer who is affiliated with such foreign producer or exporter." Section 1675(a)(4) further provides that Commerce shall notify the International Trade Commission ("ITC") of its findings regarding such duty absorption for the ITC to consider in conducting a five-year ("sun-set") review under 19 U.S.C. § 1675(c) (1994), and the ITC will take such findings into account in determining whether material injury is likely to continue or recur if an order were revoked under § 1675(c). See 19 U.S.C. § 1675a(a)(1)(D) (1994).

On December 11, 1996, Timken requested Commerce to conduct a duty absorption inquiry pursuant to § 1675(a)(4) with respect to various respondents, including NTN, NSK and Koyo, to ascertain whether antidumping duties had been absorbed during the administrative reviews of the 1976 and 1987 antidumping duty orders. See Final Results, 63 Fed.Reg. at 2558.

In the Final Results, Commerce found that duty absorption had occurred for the POR. See id. at 2559. In asserting authority to conduct a duty absorption inquiry under § 1675(a)(4), Commerce first explained that for "transition orders," as defined in 19 U.S.C. § 1675(c)(6)(C) (antidumping duty orders, inter alia, orders issued on or after January 1, 1995), regulation 19 C.F.R. § 351.213(j) (1998) provides that Commerce "will make a duty-absorption determination, if requested, for any administrative review initiated in 1996 or 1998." Final Results, 63 Fed.Reg. at 2558. Commerce concluded that: (1) because the antidumping duty orders on TRBs in this case have been in effect since 1976 and 1987, respectively, the orders are transition orders pursuant to § 1675(c)(6)(C); and (2) since these reviews were initiated in 1996 and a request was made, Commerce had the authority to make duty absorption inquiries for the administrative reviews of the 1976 and 1987 antidumping duty orders. See id. at 2558-59.

B. Contentions of the Parties

NTN, NSK and Koyo contend that Commerce lacked authority under § 1675(a)(4) to conduct a duty absorption inquiry for the POR of the outstanding 1976 and 1987 antidumping duty orders.² See NTN's Mem. Supp. Mot. J. Agency R. ("NTN's Mem.") at 27-32; NTN's Reply Br. Jan. 22, 1999 Resp. Brs. United States and Timken ("NTN's Reply") at 2; NSK's Mem. P. & A. Supp. Mot. J. Agency R. ("NSK's Mem.") at 12-16; NSK's Reply Mem. Supp. Mot. J. Agency R. ("NSK's Reply") at 6-8; Koyo's Mem. P. & A. Supp. Mot. J. Agency R. ("Koyo's Mem.") at 9-14; Koyo's Reply Br. Supp. Mot. J. Agency R. ("Koyo's...