Zenith Electronics Corp. v. US, Court No. 87-01-00039.
| Decision Date | 29 July 1991 |
| Docket Number | Court No. 87-01-00039. |
| Citation | 770 F. Supp. 648,15 CIT 394 |
| Parties | ZENITH ELECTRONICS CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and AOC International, et al., Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Frederick L. Ikenson, P.C. (Frederick L. Ikenson, J. Eric Nissley and Larry Hampel, of counsel), Washington, D.C., for plaintiff.
Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, U.S. Dept. of Justice, Jeanne Davidson, Atty., and Leila J. Afzal, Attorney-Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, D.C., for defendant.
Willkie Farr & Gallagher (Christopher A. Dunn, William J. Clinton and Zygmunt Jablonski, of counsel), Washington, D.C., for defendants-intervenors.
Grunfeld, Desiderio, Lebowitz & Silverman (Bruce M. Mitchell, of counsel), New York City, for defendant-intervenor Capetronic (BSR) Ltd.
In this action, plaintiff Zenith Electronics Corporation ("Zenith") challenges the final results of the first administrative review of the antidumping order covering colored television receivers ("CTVs") from Taiwan. 51 Fed.Reg. 46,895 (December 29, 1986). In that review the International Trade Administration ("ITA") of the Department of Commerce ("Commerce") found the following dumping margins for the first review period:
Weighted Average
Respondent Margin
AOC International, Inc. 1.38%
Capetronic (BSR) Ltd. .46%
Fulet Electronic Industrial Co. 2.09%
Nettek Corp. _____
RCA Taiwan, Ltd. 5.24%
Sampo Corp. 10.14%
Shinlee Corp. 10.14%
Shin-Shirasuna Electric Corp. .56%
Tatung Co. 4.01%
The administrative review was conducted for the purpose of determining the antidumping duties for the period under review and for establishing cash deposit rates for subsequent entries. Prior to this review, the importation of CTVs from Taiwan had been subject to a final affirmative less than fair value determination made on March 1, 1984. 49 Fed.Reg. 7623 (March 1, 1984). In that final determination, Commerce had found the following dumping margins:
Weighted Average
Respondent Margin
AOC International, Inc. 3.50%
Fulet Electronic Industrial Co. 23.77%
Hitachi Television (Taiwan) Inc. 26.00%
Orion Electric (Taiwan) Co. .01%
RCA Taiwan, Ltd. 2.89%
Sampo Corp. 23.77%
Sanyo 4.66%
Tatung Co. 8.10%
All Others 5.46%
The review determination applies to nine Taiwanese manufacturers/exporters of CTVs; AOC International, Inc. ("AOC"); Capetronic (BSR) Ltd. ("Capetronic"); Fulet Electronic Industrial Co., Ltd. ("Fulet"); Nettek Corp. ("Nettek"); RCA Taiwan, Ltd. ("RCA"); Sampo Corp. ("Sampo"); Shinlee Corp. ("Shinlee"); Shin-Shirasuna Electric Corp. ("Shirasuna"); and Tatung Co. ("Tatung"). These companies are referred to collectively as the Taiwanese or the Respondents. AOC, Capetronic, Fulet, Nettek, Sampo, and Tatung appear herein as defendant-intervenors.
Zenith challenges nine aspects of the review determination. They can be briefly described as the tax adjustment, the treatment of antidumping-related legal expenses, the application of a cap to duty assessment rates, the calculation of duty deposit rates, the use of a per se de minimis rule for certain small dumping margin amounts, the adjustment of constructed value for differences in circumstances of sale, the treatment of home market expenses for exports, the drawback adjustment, and the existence vel non of a fictitious market in the case of certain CTV sales.
Zenith also asserts the existence of three errors in data manipulation; first, that Commerce calculated an erroneous constructed value for Capetronic; second, that Commerce failed to remove certain selling expenses from Shirasuna's United States price ("USP"); and, third, that Commerce failed to match certain United States sales by AOC and Tatung with the proper comparison home market sales.
Commerce concedes the last of the three data errors alleged by Zenith and requests a remand for its correction. As will be discussed in its proper place, Commerce also requests a remand for one aspect of the de minimis issue. In all other respects, Commerce defends its review determination as being in accordance with the law and based on substantial evidence in the record. The Court now turns to the resolution of these issues.
The first issue raised by Zenith is that Commerce erred in the way that it accounted for the fact that the Taiwanese Commodity Tax was forgiven on exported CTVs. Commerce subtracted the amount of the forgiven commodity tax from foreign market value ("FMV"). In Zenith Elecs. Corp. v. United States, 10 C.I.T. 268, 633 F.Supp. 1382 (1986), appeal dismissed, 875 F.2d 291 (Fed.Cir.1989) this Court held that § 772(d)(1)(C) of the Tariff Act of 1930 as amended, 19 U.S.C. § 1677a(d)(1)(C), requires Commerce to account for forgiven tax on exported merchandise by making an upward adjustment to United States Price ("USP") in the amount actually forgiven on the exports. This Court has ruled that the statutory language requires Commerce to calculate the adjustment for forgiven taxes as an addition to USP in the amount of tax forgiven on exports, and to measure the extent to which tax was actually passed through to home market purchasers so that only the forgiveness of that amount of tax can enter into the calculations.
The tax involved here is a 20 per cent commodity tax imposed by Taiwan on all CTVs, but then forgiven on exportation. The Court sees no difference between the Taiwanese Commodity Tax and the taxes previously found subject to this requirement. The Court has continued to adhere to this interpretation of the law, most recently in Daewoo Elecs. Co. v. United States, ___ C.I.T. ___, 712 F.Supp. 931 (1989).
The Court also notes that the only proper use of circumstances of sale adjustment in this situation would be for those circumstances of sale which do not flow from the existence of an originally determined dumping price as set out in Daewoo. This issue is remanded to Commerce with directions to determine the amount of tax passed through to home market purchasers and to add that amount to USP.
Zenith next argues that, by virtue of 19 U.S.C. § 1677a(e)(2), Commerce should have deducted from USP those legal expenses which were related to the antidumping proceedings and which were paid during the period under review. Zenith claims that this falls within the law's requirement that Commerce deduct from Exporter's Sale Price, ("ESP"), all generally incurred expenses by or for the account of the exporter in the United States. In Daewoo Elecs. Co. v. United States, ___ C.I.T. ___, 712 F.Supp. 931 (1989), the Court agreed with Commerce that legal fees incurred in connection with antidumping proceedings should not be considered as selling expenses within the meaning of the law. Zenith's argument has a superficial plausibility but it would offend important considerations of fairness in these matters. A party's cost of protecting its rights in legal proceedings should themselves become a factor in whether or not a party is engaged in dumping. To hold otherwise would resemble the situation in which a party appears only to challenge the jurisdiction of a court and has that appearance used against it as an indicia that the jurisdiction of the court is proper in the case.
This is not really a question of whether or not the legal expenses can be related to the time period of the importation of the merchandise under review. Nor does it relate to the question of whether or not the legal expenses have a tendency to ultimately aid the sale of the merchandise in the United States, which they well may have. Nor is the deciding point the fact that these legal expenses alone in some cases could create dumping where no preexisting dumping exists, although that would certainly be a palpable unfairness. Relying on the latter rationale might lead to reasoning that in those cases ultimately found to have preexisting dumping it might be proper to subsequently account for dumping related legal expenses. The fundamental reason for not allowing the use of legal expenses which are related to antidumping proceedings is that the expenses of a party's participation in legal proceedings provided by law should not become an element in the decision of those selfsame proceedings. On this point, Commerce's position is affirmed. The Court continues to approve the view that such legal expenses should not be deducted from U.S. Price.
Zenith has raised a complex question with respect to the assessment of duty on entries of Taiwanese CTVs which were made before the issuance of the final antidumping duty order. In the normal course of events, deposits of estimated antidumping duty are required for the periods between Commerce's preliminary less than fair value determination and its final determination of less than fair value and again between the final determination and the issuance of an antidumping duty order. These are provisional payments of duties. The question before the Court is to what extent, if any, Commerce is required to assess final duties in excess of the provisional rates which were in effect in the interim periods.
With respect to entries made in the interim period Commerce takes the position that it does not have the authority to...
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