Sawhill Tubular Div. Cyclops Corp. v. US

• Decision Date: 13 July 1987
• Docket Number: Court No. 86-05-00574.
• Citation: 11 CIT 491,666 F. Supp. 1550
• Parties: SAWHILL TUBULAR DIV. CYCLOPS CORP., Atcor, Inc., and Wheatland Tube Corp., Plaintiffs, v. UNITED STATES, Defendant, Tata Iron & Steel Co., Ltd., Defendant-Intervenor.
• Court: U.S. Court of International Trade

666 F. Supp. 1550

11 CIT 491

SAWHILL TUBULAR DIV. CYCLOPS CORP., Atcor, Inc., and Wheatland Tube Corp., Plaintiffs, v. UNITED STATES, Defendant Tata Iron & Steel Co., Ltd., Defendant-Intervenor.

Court No. 86-05-00574.

United States Court of International Trade.

July 13, 1987.

Schagrin Associates, (Paul W. Jameson, Washington, D.C., on the motion), for plaintiffs.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch (A. David Lafer, Washington, D.C., on the motion), for defendant.

Kaplan Russin & Vecchi (Dennis James, Jr. and Kathleen F. Patterson, Washington, D.C., on the motion), for defendant-intervenor.

MEMORANDUM OPINION

CARMAN, Judge:

By a motion for judgment upon the agency record under Rule 56.1 of the Rules of this Court, plaintiffs challenge the final affirmative determination of the International Trade Administration (ITA or Commerce) in Certain Welded Carbon Steel Standard Pipe and Tube From India; Final Determination of Sales at Less Than Fair Value, 51 Fed.Reg. 9089 (March 17, 1986). Plaintiffs contest that part of the final determination which found that welded carbon steel pipe and tube (pipe and tube or standard pipe and tube) produced by Tata Iron and Steel Tubes Ltd. (TISCO) were being sold in the United States below fair market value, and that the estimated weighted average dumping margin was 7.08%.

Plaintiffs contend the ITA's decision to deduct from foreign market value (FMV) an export rebate in the amount of the difference between the cost of steel in India and the international price of steel as a circumstance of sale under 19 U.S.C. § 1677b(a)(4)(B) was not in accordance with law. By contrast, the defendant contends the ITA's adjustment was correct since the export payment effectively reduced TISCO's export related costs and was directly related to TISCO's pipe and tube sales in the United States.

This Court holds the ITA's determination to make a circumstances of sale adjustment to FMV under § 1677b(a)(4)(B) in the amount of the export rebate paid to TISCO was reasonable since it was consistent with a reasonable interpretation of the circumstances of sale provision.

FACTS

On July 16, 1985, the Standard Pipe and Tube Subcommittee of the Committee on Pipe and Tube Imports and each of the member companies who produce standard pipe and tube filed a petition with the ITA and the International Trade Commission (ITC). The petitioners alleged that imports of standard pipe and tube were being sold in the United States at less than fair value causing material injury to the domestic pipe and tube industry.

The ITA determined the petition contained sufficient grounds upon which to initiate an antidumping duty investigation. The ITA thereupon notified the ITC which determined there was a reasonable indication that imports of standard pipe and tube were materially injuring, or threatening material injury, to a U.S. industry. See Certain Welded Carbon Steel Pipes and Tubes From India, Taiwan, Turkey, and Yugoslavia; Determinations, 50 Fed.Reg. 37068 (Sept. 11, 1985).

During the course of the investigation, TISCO made various claims for an adjustment for the export payments received under the International Price Reimbursement Scheme (IPRS).¹

In its affirmative preliminary determination, the ITA denied any adjustment to FMV for the IPRS. TISCO was found to have a dumping margin of 50.37%. Certain Welded Carbon Steel Standard Pipe and Tube From India; Preliminary Determination of Sales at Less Than Fair Value, 50 Fed.Reg. 53356 (Dec. 31, 1985).

During verification, the ITA determined that the IPRS payment was paid only to Indian manufacturers of pipe and tube that used domestically produced steel in the manufacture of their exported products. If the companies used imported steel or failed to export the pipe and tube, no payments were received. The IPRS payment is equal to the difference between the domestic price and the government-determined international price of steel. See Record at 882-83.

The ITA also verified that domestic steel prices are established by the Joint Planning Committee (JPC). Funding for the IPRS payment is provided by the Engineering Goods Exports Assistance Fund (EGEAF). The JPC price of steel includes a levy for the EGEAF. Id.

In the final determination, the ITA reduced FMV by the amount of the IPRS payment as a circumstances of sale adjustment under § 1677b(a)(4)(B). TISCO was found to have a dumping margin of 7.0-8%. Petitioners commented upon the adjustment, and the ITA responded as follows:

Comment 1: Petitioners argue that the Department should not make a circumstances of sale adjustment to TISCO's home market sales price for the International Price Reimbursement Scheme (IPRS) because (1) the program might be countervailable; or (2) the program is not comparable to any situation in which circumstance of sale adjustments ordinarily are allowed; or (3) the program is merely an institutionalized cover for dumping because TISCO both pays into and receives rebates from the program.

DOC Response: We disagree. First, the countervailability of the IPRS should be addressed in the context of a countervailing duty investigation. Here, we are determining whether the IPRS meets the requirements for a difference in circumstances of sale adjustment, as provided for in the law and § 353.15 of the Commerce Regulations. Secondly, in this case, the IPRS rebate is directly related to, and in fact contingent upon, the export sale of the merchandise under investigation. Receipt of the IPRS effectively enhanced the net return to TISCO on those sales. Therefore, we believe this adjustment is comparable to other circumstances of sale adjustments.

Third, although TISCO pays required levies into and receives payments from the Engineering Goods Exports Assistance Fund (EGEAF), it does so according to the rates established by the Indian government. Monies for this generalized fund come from assessments included in the government-set price of steel. The formula for rebates is tied to the difference between domestically-produced and internationally-acquired steel prices. As such, the fact that this rebate acts as a revenue enhancement for TISCO does not constitute dumping.

51 Fed.Reg. at 9091.

BACKGROUND

The antidumping law provides for the imposition of antidumping duties when imported merchandise is sold or is likely to be sold in the United States at less than fair value. In general, it must also be determined that an industry in the United States is being or is likely to be injured or prevented from being established as a result of these sales. 19 U.S.C. § 1673.

In general terms, merchandise is sold at less than fair value when the purchase price or the exporter's sales price is less than its FMV. FMV is defined to include the price of the merchandise, at the time of exportation to the United States, at which such or similar merchandise is sold or offered for sale in the home market in the usual wholesale quantities and in the ordinary course of trade. 19 U.S.C. § 1677b(a).²

When it is established to the satisfaction of the administering authority that the amount of the difference between the USP and the FMV is wholly or partially attributable to other differences in the circumstances of sale, an adjustment to FMV is appropriate. The statutory authority for adjustment provides as follows:

(4) Other adjustments.—In determining foreign market value, if it is established to the satisfaction of the administering authority that the amount of any difference between the United States price and the foreign market value (or that the fact that the United States price is the same as the foreign market value) is wholly or partly due to—

....

(B) other differences in circumstances of sale; or

.... then due allowance shall be made therefor.

19 U.S.C. § 1677b(a)(4)(B).³ The Commerce regulation governing the circumstances of sale adjustment provides in pertinent part as follows:

§ 353.15 Differences in circumstances of sale.

(a) In general. In comparing the United States price with the sales, or other criteria applicable, on which a determination of foreign market value is to be based, reasonable allowances will be made for bona fide differences in the circumstances of the sales compared to the extent that it is established to the satisfaction of the Secretary that the amount of any price differential is wholly or partly due to such differences. Differences in circumstances of sale for which such allowances will be made are limited, in general, to those circumstances which bear a direct relationship to the sales which are under consideration.

(b) Examples. Examples of differences in circumstances of sale for which reasonable allowances generally will be made are those involving differences in credit terms, guarantees, warranties, technical assistance, servicing, and assumption by a seller of a purchaser's advertising or other selling costs. Reasonable allowances also generally will be made for differences in commissions. Allowances generally will not be made for differences in advertising and other selling costs of a seller, unless such costs are attributable to a later sale of the merchandise by a purchaser.

....

(d) Determination of allowances. In determining the amount of the reasonable allowances for any differences in circumstances of sale, the Secretary will be guided primarily by the cost of such differences to the seller, but, where appropriate, he may also consider the effect of such differences upon the market value of the merchandise.

19 C.F.R. § 353.15.

DISCUSSION

The question presented for decision is whether or not the ITA acted in accordance with law when it reduced FMV, as a circumstance of sale pursuant to § 1677b(a)(4)(B), in the amount of the IPRS export payment received by Indian exporters of standard pipe and tube. Plaintiffs' basic position is that the IPRS rebate is not within the class of situations that the statute,...