U.S. Steel Group a Unit of Usx Corp. v. U.S., Slip Op. 97-95.
| Decision Date | 14 July 1997 |
| Docket Number | Slip Op. 97-95.,Court No. 95-09-01144. |
| Citation | 973 F.Supp. 1076 |
| Parties | U.S. STEEL GROUP A UNIT OF USX CORPORATION, USS/Kobe Steel Co., and Koppel Steel Corp., Plaintiffs, v. UNITED STATES, Defendant, Siderca S.A.I.C. and Siderca Corporation, Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Skadden, Arps, Slate, Meagher & Flom (Robert E. Lighthizer, John J. Mangan), Washington, DC, for Plaintiffs U.S. Steel Group a Unit of USX Corp, USS/Kobe Steel Co., and Koppel Steel Corp.
Schagrin Associates (Roger B. Schagrin, R. Alan Luberda), Washington, DC, for Plaintiff-Intervenor Maverick Tube.
Wiley, Rein & Fielding (Charles Owen Verrill, John R. Shane), Washington, DC, for Plaintiff-Intervenor North Star Steel.
Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director; Velta A. Melnbrencis, Assistant Director, Dept. of Justice, Civil Division, Commercial Litigation Branch; Barbara Campbell-Potter, Attorney-Advisor Office of the Chief Counsel for Import Administration, Dept. of Commerce, for Defendant.
White & Case (David P. Houlihan, Gregory J. Spak, Christopher M. Curran, Richard J. Burke), Washington, DC, for Defendant-Intervenors Siderca S.A.I.C. and Siderca Corp.
Plaintiffs, Siderca and Siderca S.A.I.C. ("Siderca") and U.S. Steel ("domestic producers"), filed separate actions challenging aspects of the International Trade Administration's final determination in Oil Country Tubular Goods From Argentina, 60 Fed. Reg. 33,539 (Dep't Commerce 1995) (final det.) [hereinafter Final Det.]. The two actions were consolidated.
The Court has jurisdiction under 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(A).
On July 26, 1994, Commerce initiated an antidumping investigation of oil country tubular goods (OCTG) from Argentina pursuant to 19 U.S.C. § 1673a (1988). Oil Country Tubular Goods From Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain, 59 Fed.Reg. 37,962 (Dep't Commerce 1994) (init. antidumping duty investigations).1 In such an investigation, Commerce compares foreign market value and United States price2 to determine whether dumping exists, and to calculate the dumping margin.
In the course of the investigation, Commerce issued an antidumping questionnaire to Siderca and verified Siderca's responses. Commerce determined that home market (i.e., Argentine) sales were not "viable" during the period of investigation, January 1 through June 30, 1994, i.e., Commerce decided that Siderca's home market sales were not adequate for the purpose of determining foreign market value ("FMV") of oil country tubular goods ("OCTG"). Therefore, Commerce decided to base FMV upon sales of OCTG to the People's Republic of China ("PRC" or "China").3
In its preliminary determination, Commerce found a dumping margin for Siderca of 0.61%. See Oil Country Tubular Goods From Argentina, 60 Fed.Reg. 6503 (Dep't. Commerce 1995) (prelim. det. & postponement final det.). Subsequently, Commerce issued an Amended Preliminary Determination in order to correct the Preliminary Determination for a clerical error. See Oil Country Tubular Goods From Argentina, 60 Fed.Reg. 13,119 (Dep't. Commerce 1995) (am.prelim.det.). In the Amended Preliminary Determination Commerce found a dumping margin for Siderca of 0.42%, see id. at 13,119, a de minimis dumping margin under Commerce's regulations.4
After verification, Commerce made a final determination that Siderca's dumping margin was 1.36%. See Final Det., 60 Fed.Reg. at 33,550. Because Commerce found a dumping margin for Siderca above the de minimis level, and the International Trade Commission found that a domestic industry was materially injured or threatened with material injury by reason of imports of the subject merchandise. See Oil Country Tubular Goods from Argentina, 60 Fed.Reg. 41,055, 41,055 (Dep't. Commerce 1995) (antidumping duty order). Commerce issued an antidumping duty order for OCTG from Argentina. Id.
Siderca objects to Commerce's Final Determination contending that Commerce's circumstance of sale ("COS") adjustment for indirect tax rebates was improper. The domestic steel producers object to the Final Determination for the following reasons: 1) In determining Siderca's cost of production, Commerce relied on budgeted rather than actual figures for Siderca's per-unit fixed costs; 2) Commerce allowed Siderca to offset its general expenses with revenues from miscellaneous sales; and 3) Commerce deducted the full amount of Siderca's indirect tax rebate from its cost of production.
In reviewing a final antidumping determination the Court of International Trade must decide whether Commerce's determination is in accordance with law and whether Commerce's conclusions are supported by substantial evidence on the record. 19 U.S.C. § 1516a(b)(1)(B)(1994).
When Commerce's interpretation of the antidumping statute is challenged, this court applies the two-step analysis articulated in Chevron U.S.A. v. Natural Resources Defense Council, Inc.,5 as applied and refined by the Federal Circuit. Considerable weight is accorded Commerce's construction of the antidumping laws, whether that construction manifests itself in the application of the statute, see, e.g., Daewoo Elec. Co. v. Int'l Union of Elec., Technical, Salaried and Mach. Workers, 6 F.3d 1511, 1516 (Fed.Cir.1993), cert. denied 512 U.S. 1204, 114 S.Ct. 2672, 129 L.Ed.2d 808 (1994), or in the promulgation of a regulation, see, e.g., Smith-Corona Group v. United States, 713 F.2d 1568, 1575 (Fed.Cir.1983), cert. denied 465 U.S. 1022, 104 S.Ct. 1274, 79 L.Ed.2d 679 (1984).
When examining Commerce's factual determinations to decide whether they are supported by substantial evidence, the court must determine whether the record contains "such relevant evidence as a reasonable mind might accept as adequate to support Commerce's conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (quoted in Matsushita Elec. Indus. Co., Ltd. v. United States, 3 Fed. Cir. (T) 44, 750 F.2d 927, 933 (1984)). Substantial evidence "is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Fed. Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966) (citations omitted).
The Government of Argentina has adopted a cumulative, indirect tax system pursuant to which certain indirect taxes are imposed at various stages of production, become embedded in the price of the product at those stages, and are then passed on to the next stage through the price of the intermediate product. This system is cumulative because the indirect taxes imposed at a given stage of production become embedded in the price of the product at the next stage of production, with indirect taxes again imposed on the total value of the product at that stage. The Government of Argentina also has a tax rebate program (the reintegro system, formerly the reembolso system), which provides for government rebate, upon export, of indirect taxes imposed and embedded in the price of the finished product.
In response to Commerce's antidumping questionnaire, Siderca reported that the indirect tax rebate amount it received for sales of OCTG to the United States differed from the rebate amount for sales to the PRC. Specifically, for sales to the PRC, Siderca received the full amount of the allowable rebate for OCTG: 15%. For sales to the United States, however, Siderca received only a partial rebate of the total allowable amount: 8.3%. (U.S. Dep't. of Commerce Verification of Production and Constructed Value Data, April 26, 1995 at 2 ).
In the Final Determination, Commerce explained:
Included in Siderca's manufacturing costs of OCTG are taxes paid to the Argentine government. Siderca received a rebate of these taxes upon exportation of the merchandise. However, the amount of the rebate claimed by Siderca for the two export markets was not identical.... Because only a partial rebate is taken for U.S. sales, a portion of the tax imposed by the Argentine government remains in the U.S. price (the difference between the total rebate and the partial rebate taken). Because these rebates are directly related to the sales of the merchandise in the two markets, it is necessary to make a circumstance-of-sale adjustment to FMV to account for the different amount of taxes included in the Chinese and U.S. prices....
In calculating dumping margins, the Department equalizes the effective rates in each market. Normally (... the home market sale is taxed, but the export sale to the United States is not taxed).... Here, ... the pipe exported to the United States was taxed in excess of the tax on the pipe exported to China.... Because the statute provides no mechanism for removing tax from the U.S. price, however, we achieved the necessary equivalence in tax rates by adding the difference between the effective rebate percentages claimed by Siderca ... to the price of the pipe exported to China as a circumstance-of-sale adjustment,. ... This prevented Siderca's acceptance of a complete tax rebate on the sales to China, but only a partial export tax rebate on the sales to the United States from masking any tax-net dumping margin.
60 Fed.Reg. at 33,546-47 (Comment 6).
Commerce raised FMV by 6.1%,6 which is the amount of the difference in rebates claimed by Siderca between sales for export to the PRC and to the United States.
1. Siderca argues that Commerce's circumstances of sale adjustment was ...
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