Wheatland Tube Co. v. U.S.
| Decision Date | 17 January 2006 |
| Docket Number | Slip Op. 06-8. Court No. 04-00568. |
| Citation | 414 F.Supp.2d 1271 |
| Parties | WHEATLAND TUBE COMPANY and Allied Tube & Conduit Corporation, Plaintiffs, v. UNITED STATES, Defendant, and Saha Thai Steel Plpe Company, Ltd., Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Schagrin Associates (Roger B. Schagrin), Washington, DC, for Plaintiffs.
Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Jeanne E. Davidson, Deputy Director, Civil Division, Commercial Litigation Branch, U.S. Department of Justice (David S. Silverbrand), for Defendant.
O'Melveny & Myers LLP (Veronique Lanthier & Greyson Bryan), Washington, DC, for Defendant-Intervenor.
This case comes before the Court on Plaintiffs' Motion for Judgment on the Agency Record. Plaintiffs, Wheatland Tube Company and Allied Tube & Conduit Corporation, contest the treatment accorded certain duty drawback adjustments and § 201 duties1 by the United States Department of Commerce ("Defendant" or "Commerce") in Certain Welded Carbon Steel Pipes and Tubes from Thailand ("Final Results"), 69 Fed.Reg. 61,649 (Dep't Commerce Oct. 20, 2004) (final results). Based upon the reasons that follow, the Court finds for Plaintiffs in part and Defendant in part and remands this case to Commerce for recalculation of the antidumping ("AD") margin for Defendant-Intervenor, Saha Thai Pipe Company, Ltd. ("Saha Thai" or "Respondent"), in a manner consistent with this opinion.
On April 21, 2003, Commerce issued a notice of initiation of an AD duty administrative review for circular welded carbon steel pipes and tubes ("pipe") from Thailand. Initiation of Antidumping and Countervailing Duty Administrative Reviews ("Notice of Initiation"), 68 Fed.Reg. 19,498 (Dep't Commerce Apr. 21, 2003) (notice of initiation). Plaintiffs are U.S. producers of pipe and were the petitioners in the administrative review. (Br. of Pls.' Wheatland Tube Co. & Allied Tube & Conduit Corp. in Supp. of R. 56.2 Mot. for J. on the Agency R. ( ) at 3.) The period of review ("POR") was March 1, 2002, through February 28, 2003. Notice of Initiation at 19,499. The review involved a single Thai producer of subject pipe: Saha Thai. Id.
On March 5, 2002, the President of the United States imposed § 201 safeguard duties on imports of certain steel products, including the subject pipe. Proclamation No. 7529 ("Proclamation 7529"), 67 Fed. Reg. 10,553 (Mar. 7, 2002). When entered for consumption between March 20, 2002, through March 19, 2003, the Proclamation 7529 mandated payment of an additional 15% duty on imported covered steel products. Id. at 10,590.
On April 8, 2004, Commerce issued the preliminary results of the pipe administrative review. Certain Welded Carbon Steel Pipes and Tubes from Thailand ("Preliminary Results"), 69 Fed.Reg. 18,539 (Dep't Commerce Apr. 8, 2004) (preliminary results). Because Saha Thai is not affiliated with its U.S. customers, Commerce calculated the export price ("EP") of the subject pipe based upon the price from Saha Thai to the first unaffiliated U.S. purchaser in accordance with § 772(a) of the Tariff Act of 1930 2 (the "Act"). Id. at 18,540.
As required by § 772(c)(2) of the Act,3 Commerce deducted-where appropriate-foreign inland freight, foreign brokerage and handling, foreign inland insurance, bill of lading charges, ocean freight to the U.S. port, U.S. brokerage and handling charges, and U.S. duty. Id. During the preliminary review, Saha Thai requested that certain adjustments be made to the EP in accordance with § 772(c)(1)(B) of the Act. Section 772(c)(1)(B) requires that Commerce increase the EP 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." 19 U.S.C. § 1677a(c)(1)(B) (2000) (emphasis added). Saha Thai claimed that it was eligible for an increase in EP due to its use of a Thai customs bonded warehouse, which entitled Saha Thai to an exemption from duties on imports of raw materials used in the manufacture of exported pipe. Prelim. Results, 59 Fed.Reg. at 18540. Upon verification, Commerce adjusted Saha Thai's EP upward to reflect the exempted import duties. Id.
During the preliminary review, Commerce also considered whether it should deduct from EP the § 201 duties Saha Thai paid upon importation of subject merchandise into the United States after March 20, 2002. Id. at 18,541. Because 'the agency had never before addressed this issue, Commerce made no adjustment to the EP for § 201 duties for purposes of the Preliminary Results. Id.
After considering a number of other issues, Commerce calculated Saha Thai's preliminary weighted-average dumping margin at 2%. Id. at 18,542.
The Final Results differed from the Preliminary Results. Final Results, 69 Fed. Reg. at 61,649. In the Final Results, Commerce calculated Saha Thai's weighted-average margin to be 0.17%. Id. at 61,-650. Because the margin in the final results was de minimis, Saha Thai's cash deposit rate for the POR was zero. Id. The variance between the Preliminary and Final Results is the effect of Commerce permitting Saha Thai to add certain billing adjustments for § 201 duties to the EP of the subject pipe and to minor corrections to the margin program. Id.
1. Whether Commerce should exclude from EP § 201 duties paid by Saha Thai on subject goods imported into the United States.
2. Whether Commerce should revise EP upward to reflect billing adjustments Saha Thai requested to account for post-sale invoices it dispatched to its customers.
3. Whether Commerce erred in permitting Saha Thai to claim a drawback adjustment to EP absent proof that Saha Thai paid import duties on inputs used in the production of subject merchandise sold in the domestic market.
Plaintiffs raise two primary issues on review by this Court: Commerce's treatment of 1) § 201 duties applicable to Saha Thai's imports and 2) drawback adjustments requested by Saha Thai.
Plaintiffs take issue with Commerce's treatment of the § 201 duties for three reasons. First, Plaintiffs contend that Commerce's failure to deduct § 201 duties from the EP violates 19 U.S.C. § 1677a(c)(2)(A). (Pls.' Br. at 16.) Plaintiffs submit that § 201 duties are "import duties" that must be deducted from EP in compliance with the statute. Plaintiffs reason that if the § 201 duties are not deducted from EP they are transformed "into a credit against the antidumping margins that would otherwise exist." (Id. at 16-17.) Plaintiffs point out that the § 201 duty payment credit may completely eliminate dumping margins, as it did in this matter. (Id. at 17.) Further, Plaintiffs allege that had the § 201 duties remained in place for three or more years the § 201 duty credit "could result in a series of negative or de minimis results leading to the final revocation of the antidumping duty order and the termination of relief from unfair dumping." (Id.)
Second, Plaintiffs insist that it was improper for Commerce to permit upward adjustments to EP due to supplemental invoices Saha Thai issued to its customers for the § 201 duties. Plaintiffs maintain that "[t]he upward adjustment is improper on its face because the transaction price of the sale had already been established and the post-sale adjustment was attributable solely to the newly applicable Section 201 duty." (Id. at 18.)
Third, Plaintiffs claim that Commerce's treatment of § 201 duties "countermands the President's action" in imposing § 201 relief. (Id. at 19.) According to Plaintiffs, because the President's proclamation implementing § 201 acknowledged the ongoing effect of AD duties, Commerce's decision to accept § 201 "duty-inclusive prices" was a usurpation of the President's power and privilege to impose § 201 relief. (Id. at 18-19.)
Plaintiffs state that the rationale for the duty drawback adjustment is "to offset duties that are paid on inputs used in production of merchandise sold in the home market." (Id. at 9 (quotation & citation omitted).) Plaintiffs argue that Commerce failed to follow a "clearly enunciated" policy and "established statutory interpretation" that were designed to achieve the purpose of the drawback adjustment. (Id.) In support of its position, Plaintiffs cite an unrelated (to this case) Commerce final determination in Silicomanganese from Venezuela ("Silicomanganese"), 67 Fed.Reg. 15,533 (Dep't Commerce Apr. 2, 2002) (final determination). (Id.)
Plaintiffs seek to bind Commerce to the position it took in Silicomanganese, which Plaintiffs claim support their position here. Plaintiffs assert that the present case is similar to Silicomanganese, and therefore, the cases-absent justification-must be treated the same. (Id. at 12.) According to Plaintiffs, in Silicomanganese, Commerce denied drawback adjustments claimed by Hevensa (the respondent) because Hevensa failed to establish that it paid import duties on goods used to produce merchandise for the domestic market. (Id. at 10.) On review, this court upheld Commerce's denial of the Hevensa's claimed drawback adjustments. Hornos Electricos de Venezuela, S.A. (Hevensa) v. United States, 27 CIT —, 285 F.Supp.2d 1353 (2003). Therefore, Plaintiffs argue that payment of duties on imported inputs used in production of subject goods for sale in the domestic market must be proved before a respondent may avail itself of a drawback adjustment to EP.
Plaintiffs also argue that drawback adjustments should be treated like other circumstances of sales adjustments, "which `are made when the seller incurs certain costs in its home market sales that it does not incur when selling to [the] United States market.'" (Id. at 15 (citation omitted).) Because Saha Thai had no duty...
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