Thai Plastic Bags Industries Co., Ltd. v. United States

Slip Op. 12-86
UNITED STATES COURT OF INTERNATIONAL TRADE
THAI PLASTIC BAGS INDUSTRIES CO.,
LTD., POLYETHYLENE RETAIL CARRIER
BAG COMMITTEE, HILEX POLY CO.,
LLC, and SUPERBAG CORPORATION,
Plaintiffs,
v.
UNITED STATES,
Defendant.
Before: Donald C. Pogue,
Chief Judge
Consol. 1 Court No. 11-00086
Public Version
OPINION
[Plaintiffs’ motion for judgment on the agency record GRANTED in
part and DENIED in part].
Dated: June 18, 2012
Irene H. Chen, Cen Law Group LLC, of Rockville, MD, and
Mark B. Lehnardt, Lehnardt & Lehnardt LLC, of Liberty, MO, for
Plaintiff.
Joseph W. Dorn, Stephen A. Jones, and Daniel L.
Schneiderman, King & Spalding, of Washington, DC, for
Consolidated Plaintiffs.
Vincent D. Phillips, Trial Attorney, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, of
1 This action is consolidated with Court Nos. 11-00086 and
11-00090.
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Washington, DC, for Defendant. With him on brief were Stuart F.
Delery, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of
counsel on the brief was Scott D. McBride, Senior Attorney,
Office of the Chief Counsel for Import Administration, U.S.
Department of Commerce, of Washington, DC.
Pogue, Chief Judge: In this action, Plaintiff Thai
Plastic Bags Industries Co., Ltd. (“TPBI”), a producer of
polyethylene retail carrier bags (“PRCBs”) from Thailand, the
subject merchandise, and Plaintiffs Polyethylene Retail Carrier
Bag Committee, Hilex Poly Co., LLC, and Superbag Corporation
(collectively “PRCBC”), producers of a domestic like product,
each challenge determinations made by the United States
Department of Commerce (“Commerce” or “the Department”) in the
fifth administrative review of the antidumping (“AD”) order on
PRCBs. 2
Specifically, Plaintiffs challenge: 1) Commerce’s
adjustments to TPBI’s reported cost allocation methodology; 2)
Commerce’s use of zeroing; 3) Commerce’s cost adjustment, under
the transactions disregarded rule, for linear low density resin
(“LLD”) obtained by TPBI; and 4) Commerce’s determination that
2 See Polyethylene Retail Carrier Bags From Thailand, 76
Fed. Reg. 12,700 (Dep't Commerce Mar. 8, 2011) (final results of
antidumping duty administrative review) ("Final Results"), and
accompanying Issues & Decision Memorandum, A-549-821, ARP 08-09
(Mar. 1, 2011) Admin. R. Pub. Doc. 136, available at
http://ia.ita.doc.gov/frn/summary/THAILAND/2011-5267-1.pdf (last
visited June 15, 2012) (“I & D Mem.”) (adopted in Final Results,
76 Fed. Reg. at 12,701). 	The period of review (“POR”) was August
1, 2008 through July 31, 2009.
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TPBI’s 2009 inventory valuation losses were attributable to
finished goods inventory and were therefore excluded from the
calculation of TPBI’s general and administrative expenses for
producing its goods.
The court has jurisdiction pursuant to 28 U.S.C.
§ 1581(c).
For the reasons discussed below, issues two and three
are remanded to Commerce for reconsideration and further
explanation; Commerce’s determinations on issues one and four are
affirmed.
STANDARD OF REVIEW
Under its familiar standard of review, the court will
sustain Commerce’s determinations if they are “supported by
substantial evidence on the record,” and “otherwise . . . in
accordance with law.” See Section 516A(b)(1)(B)(I) of the Tariff
Act of 1930, 19 U.S.C. § 1516a(b)(1)(B)(I) (2006). 3 	Substantial
evidence is “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion,” Consol. Edison Co.
of N.Y. v. NLRB, 305 U.S. 197, 229 (1938), “taking into account
the entire record, including whatever fairly detracts from the
substantiality of the evidence.” Atl. Sugar, Ltd. v. United
3 Further citations to the Tariff Act of 1930 are to Title
19 of the United States Code, 2006.
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States, 744 F.2d 1556, 1562 (Fed. Cir. 1984); see also Universal
Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). 	Thus, the
substantial evidence standard of review “can be translated
roughly to mean ‘is [the determination] unreasonable?’” Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir.
2006) (quoting SSIH Equip. SA v. U.S. ITC, 718 F.2d 365, 381
(Fed. Cir. 1983)).
DISCUSSION
I. 	TPBI Issue 1: Reallocation of TPBI’s Reported Costs
Commerce, during an administrative review, determines
whether subject merchandise has been sold at less than fair
value, or “dumped,” in the United States. 	To do so, the
Department endeavors to make a fair comparison between the export
price or constructed export price of a foreign producer’s sales
and its “normal” or home market sale value. See 19 U.S.C.
§ 1677b(a); 19 U.S.C. § 1677(35)(A). 4 	This determination
requires that Commerce compare products sold in the United States
to matching “like” products sold in the home market. See 19
U.S.C. § 1677b(a)(1)(B). See also 19 U.S.C. § 1677(16); Uruguay
Round Agreements Act, Statement of Administrative Action, H.R.
Doc. No. 103-316, vol. 1, at 820 (1994) (“SAA”), reprinted in
4 “Normal value” is “the price at which the foreign like
product is first sold . . . for consumption in the exporting
country . . . .” 19 U.S.C. § 1677b(a)(1)(B)(I).
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1994 U.S.C.C.A.N. 4040, 4161 (“[T]he preferred method for
identifying and measuring dumping is to compare home market sales
of the foreign like product to export sales to the United
States.”) 	In its comparison, Commerce may, under certain
conditions, disregard sales below the producer’s cost of
production (“COP”). 5 19 U.S.C. § 1677b(b).
To the extent that not all products have an identical
match, Commerce, in accordance with the statute, may calculate a
constructed value (“CV”) of the merchandise. 	Commerce uses the
same method to calculate “costs” for both COP and CV. Compare 19
U.S.C. § 1677b(b)(3), with 19 U.S.C. § 1677b(e). See also 19
5 3) Calculation of cost of production
For purposes of this part, the cost of production shall
be an amount equal to the sum of—
(A) the cost of materials and of fabrication or
other processing of any kind employed in producing
the foreign like product, during a period which
would ordinarily permit the production of that
foreign like product in the ordinary course of
business;
(B) an amount for selling, general, and
administrative [“SG&A”] expenses based on actual
data pertaining to production and sales of the
foreign like product by the exporter in question;
and
(C) the cost of all containers and coverings of
whatever nature, and all other expenses incidental
to placing the foreign like product in condition
packed ready for shipment.
19 U.S.C. § 1677b(b)(3).
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U.S.C. § 1677b(f). 	To make its CV and COP determinations,
Commerce must consider all available evidence regarding proper
cost allocation, 19 U.S.C. § 1677b(f)(1)(A), including costs as
reported by the foreign producer. 	Such costs will, normally, be
calculated based on the producer’s records, if the records are
kept in accordance with the generally accepted accounting
principles (“GAAP”) of the exporting country and if such records
reasonably reflect the costs associated with the production and
sale of the merchandise. 19 U.S.C. § 1677b(f)(1)(A); I & D Mem.
Cmt. 1 at 9.
In addition, in calculating the normal value, Commerce
may make reasonable allowances for differences in physical
characteristics of the merchandise (its “DIFMER” adjustment). 6
As Commerce must calculate the COP and CV with as much
accuracy as possible, if the company’s reported cost allocation
methodology shifts costs away from the subject merchandise or the
foreign like product, Commerce has the authority to adjust costs
to ensure that they are not artificially reduced. Thai Plastic
6 Reasonable allowance. In deciding what is a
reasonable allowance for differences in physical
characteristics, the Secretary will consider only
differences in variable costs associated with the
physical differences. Where appropriate, the Secretary
may also consider differences in the market value. The
Secretary will not consider differences in cost of
production when compared merchandise has identical
physical characteristics.
19 C.F.R. § 351.411(b).
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Bags Indus. Co. v. United States, 34 CIT __, 752 F. Supp. 2d
1316, 1324 (2010)(“Thai Plastic Bags I”); See SAA at 834-35, 1994
U.S.C.C.A.N. at 4171-72; 19 C.F.R. 351.407(c). 7
Specifically, in the fifth administrative review of this
order, just as in the fourth administrative review, Commerce
concluded that TPBI’s reported cost allocation “resulted in
product-specific cost differences which were unrelated to
differences in physical characteristics.” Thai Plastic Bags I, 34
CIT __, 752 F. Supp. 2d at 1329; Resp. Br. of PRCBC in Opp’n to
TPBI’s Mot. for J. on Agency R. at 7, ECF No. 74 (“PRCBC’s Resp.
Br.”). 	These differences were the result of TPBI’s adjustment of
its reported “conversion costs.” 	TPBI alleges that these
adjustments were to reflect the additional time needed to process
different products. Pl.’s Rule 56.2 Mem. of Law in Supp. Of Mot.
for J. on Agency R., ECF No. 50-1, at 15 (“TPBI’s Br.). 	But
Commerce determined that TPBI’s submitted evidence showed that
TPBI’s reported cost allocation methodology did not reasonably
reflect the actual costs for producing the merchandise, Def.’s
Resp. in Opp. to Pls.’ Rule 56.2 Mot. for J. upon the Agency R.,
7 Allocation of costs. In determining the appropriate
method for allocating costs among products, the
Secretary may take into account production quantities,
relative sales values, and other quantitative and
qualitative factors associated with the manufacture and
sale of the subject merchandise and the foreign like
product.
19 C.F.R. § 351.407(c).
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ECF No. 67, at 14 (“Def.’s Br.”), and that TPBI’s reporting
methodology unreasonably distorted the cost of manufacture
(“COM”). 8 Polyethylene Retail Carrier Bags From Thailand, 75 Fed.
Reg. 53,953, 53,955 (Dep't Commerce Sept. 2, 2010) (preliminary
results of antidumping duty administrative review) (“Prelim.
Results”).
In particular, Commerce found that TPBI’s reporting
methodology was inconsistent with its normal cost-accounting
practice and the reported cost differences were unrelated to
physical differences. Id. 	Commerce found that TPBI did not
actually use its reported cost allocation methodologies in its
normal books and records, but rather created a methodology
outside of its normal business practices to report labor and
overhead costs to Commerce. Def.’s Br. at 14-15; I & D Mem.
Cmt. 1 at 10. 	Accordingly, Commerce reallocated TPBI’s reported
conversion costs. 9
TPBI argued that its cost allocation method reflected
cost differences attributable to physical characteristics; but
8 Cost of Manufacturing (“COM”) includes the direct
materials, direct labor, variable manufacturing overhead, and
fixed manufacturing overhead costs incurred in the production of
the merchandise. 	See Antidumping Manual, Chapter 9 at 5 (“AD
Manual”), available at http://ia.ita.doc.gov/admanual/index.html
(last visited June 15, 2012).
9 In doing so, Commerce calculated the sum of direct labor,
variable overhead, and fixed overhead, and applied a weighted
average of these amounts. See Final Results, 76 Fed. Reg. at
12,701; I & D Mem. Cmt. 1 at 12.
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Commerce found that TPBI’s method resulted in “great variability”
in costs for similar items having nothing to do with physical
characteristics. Def.’s Br. at 15; Prelim. Results 75 Fed. Reg.
at 53,955. 	Specifically, Commerce looked at nine pairs of
CONNUMs 10 that were very similar physically and found that under
TPBI’s allocations, these items had very different costs. I & D
Mem. Cmt. 1 at 8.
Even though TPBI explained that many variables other
than physical characteristics affected costs, Commerce found that
most of the CONNUM pairs were produced in the same facility and
had very slight physical differences, yet there were extreme
differences in production times reported. I & D Mem. Cmt. 1 at 8;
Def.’s Br. at 16. 	Commerce then determined that the record
showed that TPBI’s cost allocation methods did not reasonably
reflect actual costs because such cost disparities were not
explained by physical differences in the specific products.
Def.’s Br. at 16. 	Commerce thus relied on actual data reported
by TPBI and weight-averaged the costs across all production
lines. Def.’s Br. at 17; I & D Mem. Cmt. 1 at 12.
TPBI now challenges Commerce’s decision to replace
TPBI’s reported costs with Commerce’s average cost calculation.
TPBI’s Br. at 13. 	TPBI states that Commerce should have accepted
10 A CONNUM is a control number variable Commerce uses in
matching transactions. I & D Mem. at 2.
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TPBI’s reported costs as in accordance with GAAP principles, that
Commerce incorrectly relied on the DIFMER standard in
reallocating TPBI’s costs and that Commerce should have used
TPBI’s cost information in its calculations. See id. at 14.
However, as explained below, Commerce reasonably decided A) not
to use TPBI’s cost methodology; B) to utilize the DIFMER
standard; and C) to reject TPBI’s alternate cost methodologies.
A. 	Costs
TPBI first argues that Commerce’s decision to replace
TPBI’s reported costs with averaged costs is not supported by
substantial evidence. TPBI’s Br. at 13. 	But in its normal
accounting system, TPBI calculates a single monthly per-kilogram
average conversion cost for all products based on the costs and
quantities from the previous three months. See TPBI’s Section D
Resp., A-549-821, ARP 08-09 (Dec. 16, 2009), Admin. R. Con. Doc.
7 [Pub. Doc. 40] at D-14. 	Contrary to this normal practice, in
reporting its costs for this administrative review, TPBI used a
different reporting methodology. See id. at D-15. 	TPBI allocated
conversion costs to individual models based on production hours.
Id. at D-26 to D-28. 	Commerce rejected TPBI’s allocation as
distortive because it shifted costs away from the subject
merchandise. Def.’s Br. at 16. See I & D. Mem. Cmt. 1 at 9.
Disputing Commerce’s conclusion, TPBI maintains that
its cost allocation is a reasonable reflection of production and
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sale costs of the subject merchandise. TPBI’s Br. at 15. 	TPBI
claims that although its costs were based on actual costs, that
other variables besides physical characteristics affected the
costs. Def.’s Br. Ex. G at S5D-20 to S5D-22; Def.’s Br. at 15;
TPBI’s Br. at 7; TPBI Case Br., A-549-821, ARP 08-09 (Dec. 10,
2010), Admin. R. Con. Doc. 42 [Pub. Doc. 128] at 13. 	TPBI states
that Commerce should have reviewed those cost driving factors
(such as material inputs, order sizes, complexity of bags)
instead of relying on a sampling of nine CONNUM pairs to conclude
that there are factors other than physical characteristics that
drove cost differences. See TPBI’s Br. at 18.
But it was not unreasonable for Commerce to conclude
that TPBI’s methodology produces “great variability” in the costs
of similar items having nothing to do with the physical aspects
of the specific product. Def.’s Br. at 15; Prelim. Results, 75
Fed. Reg. at 53,955. 	Specifically, in considering the nine pairs
of CONNUMs that were very similar physically, Commerce found that
under TPBI’s reported cost allocations these items had very
different costs. I & D Mem. Cmt. 1 at 8; Def.’s Br. at 15.
Commerce correctly notes that most of the CONNUM pairs
were made at the same facility and that the evidence illustrated
that slight physical differences could not account for actual
cost differences because the disparities could not be explained
by these physical differences in the products. Def.’s Br. at 16;
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I & D Mem. Cmt. 1 at 8. 	Moreover, TPBI was unable to provide
Commerce with its actual labor and overhead costs because its
financial accounting system does not maintain such costs at a
CONNUM specific level. Def.’s Br. at 5, 14.
As TPBI’s reporting methodology deviated from its
normal accounting practice, Commerce adjusted the reported costs
to ensure that they were not artificially reduced and distortive
of true costs. I & D Mem. Cmt. 1 at 9;Def.’s Br. at 16. See also
SAA at 835; Thai Pineapple Pub. Co. v. United States, 	187 F.3d
1362, 1366 (Fed. Cir. 1999); 	Hynix Semiconductor, Inc. v. United
States, 424 F.3d 1363, 1369 (Fed. Cir. 2005) (quoting Am. Silicon
Techs. v. United States, 261 F.3d 1371, 1377 (Fed. Cir. 2001)).
Plaintiff’s reported per-unit costs shifted costs away from the
subject merchandise, and thus Commerce reasonably recalculated
Plaintiff’s costs by averaging them in order to prevent large
discrepancies in costs between merchandise that was physically
similar. Def.’s Br. at 17; I & D Mem. Cmt. 1 at 12.
B. 	DIFMER
In calculating normal value, Commerce utilizes a DIFMER
standard – i.e., a “difference in physical characteristics” or
“difference-in-merchandise” adjustment – 	in its review of what
constitutes a reasonable allowance for differences in the
physical characteristics of products sold in the U.S. and in
foreign markets. See 19 C.F.R. § 351.411(b). 	Commerce also has a
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practice of comparing cost allocations using physical
characteristics of the product in its determination of whether a
company’s cost allocation strategy reasonably reflects actual
costs. Def.’s Br. at 18.
In the Final Results Commerce stated that it considered
physical differences in its cost analysis because these
differences ultimately affect price. Def.’s Br. at 20. 	Commerce
argues that it analyzes subject merchandise costs by using
physical characteristics because this is a dependable way to
compare the different products, and that cost comparisons
utilizing physical characteristics are “key” to Commerce’s
analysis. Def.’s Br. at 18; Prelim. Cost Mem. For TPBI, A-549-
821, ARP 08-09 (Aug. 26, 2010), Admin. R. Con. Doc. 36 [Pub. Doc.
105] at 2 (“Prelim. Cost Mem.”); Def.’s Br. Ex. I at 2.
TPBI challenges Commerce’s reliance on its physical
differences, or DIFMER, analysis. TPBI’s Br. at 23-24. 	TPBI
argues that the DIFMER standard is not appropriate here, as it
was intended for use in the context of price adjustments to
normal value when there are variable cost differences between
non-identical foreign like products and the subject merchandise.
TPBI’s Br. at 24.
TPBI argues that Commerce misapplied the DIFMER
standard both in improperly weight-averaging conversion cost
differences across all products and by calculating the DIFMER
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adjustment to normal value based solely on cost differences in
materials (because the DIFMER standard is not to be used for cost
differences unrelated to physical differences). TPBI’s Br. at 26-
27.
However TPBI did not offer any meaningful evidence to
explain why physical differences in the CONNUM pairs resulted in
such large differences in conversion costs. 	As cost allocation
based on physical characteristics is a primary factor in
Commerce’s analysis, Commerce may adjust a company’s allocation
method to more reasonably reflect costs. I & D Mem. Cmt. 1 at 10;
Def.’s Br. at 19; See also 19 U.S.C.§ 1677b(b)(1)-(b)(2)(c).
PRCBC adds that it would be distortive to use different
costs for the COP, CV and DIFMER contexts; PRCBC’s Resp. Br.
at 15-17. See also I & D Mem. Cmt. 1 at 10 n.3; NTN Bearing Corp.
of America v. United States, 368 F.3d 1369, 1374 (Fed. Cir.
2004).
To the contrary, as Thai Plastic Bags I explained:
In 	its 	determination, 	Commerce 	decided 	to 	revise
TPBG's 	cost 	allocations 	(regarding 	direct 	labor,
variable 	overhead 	and 	fixed 	overhead 	costs) 	to
eliminate 	a 	“distortion” 	based 	on 	factors 	not
attributable 	to 	physical 	characteristics. 	74
Fed.Reg. 	39, 	931 	. 	. 	. 	. 	Commerce 	reallocated
TPBG's 	costs 	for 	the 	sales-below-cost 	test, 	the
constructed-value calculations and the difference-
in-merchandise 	adjustment. 	Id. 	The 	governments'
[sic] 	legal 	determination 	to 	apply 	its 	adjustment
for 	all 	three 	purposes 	was 	reasonable 	because 	the
calculation 	of 	costs 	“reasonably 	reflect[ed]” 	the
associated 	costs 	of 	production 	and 	sales. 	See 	19
U.S.C. 	§ 	1677b 	(f)(1)(A). 	As 	the 	SAA 	explains,
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Commerce 	must 	use 	a 	methodology 	that 	reasonably
captures all of the costs incurred in manufacturing
and 	selling 	the 	product 	at 	issue. 	SAA 	at 	835.
Further, 	“if 	Commerce 	determines 	that 	costs,
including 	financing 	costs, 	have 	been 	shifted 	away
from the production of the subject merchandise, or
the 	foreign 	like 	product, 	it 	will 	adjust 	costs
appropriately, to ensure they are not artificially
reduced”. 	Id. 	See 	NTN 	Bearing 	Corp. 	of 	America 	v.
U.S., 	368 	F.3d 	1369, 	1374 	(Fed.Cir.,
2004)(“Commerce 	noted 	that 	it 	‘does 	not 	rely 	on 	a
respondent's 	reported 	costs 	solely 	for 	the
calculation 	of 	COP 	and 	CV,’ 	Final 	Results, 	63
Fed.Reg. 	at 	2574, 	and 	concluded 	that 	it 	would 	be
distortive 	to 	adjust 	those 	costs 	only 	for 	those
calculations, but not for others in which they were
used. 	Id. 	(‘[I]f 	we 	determine 	a 	component 	of 	a
respondent's 	COP 	and 	CV 	is 	distortive 	for 	one
aspect 	of 	our 	analysis, 	it 	is 	reasonable 	to 	make
the same determination with respect to those other
aspects of our margin calculations where we relied
on 	the 	identical 	cost 	data.’). 	We 	concur 	with
Commerce's analysis and hold that it did not err in
interpreting 	these 	provisions 	to 	permit 	it 	to
employ 	affiliated 	supplier 	cost 	data 	to 	calculate
cost deviations to limit the definition of similar
merchandise, 	the 	difmer 	adjustment, 	and 	inventory
carrying costs.”).
Thai Plastic Bags I, 34 CIT __, 752 F. Supp. 2d at 1328 n.28.
TPBI 	also 	asserts 	that 	Commerce’s 	determination 	was
arbitrary because Commerce failed to cite a benchmark and did not
address 	all 	of 	the 	factors 	that 	might 	influence 	cost 	differences
between similar products. TPBI’s Br. at 18-20. 	In addition, TPBI
contends 	that 	Commerce’s 	regulations 	did 	not 	require 	that 	cost
differences 	unrelated 	to 	physical 	characteristics 	must 	be
reallocated or that the DIFMER standard be applied. Id. at 27-28.
However, Commerce correctly notes that it may, but is not
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under 	an 	obligation 	to 	cite 	benchmarks 	or 	address 	all 	potential
cost 	factors, 	and 	Plaintiff 	did 	not 	provide 	the 	record 	evidence
necessary 	to 	do 	so. 	Def.’s 	Br. 	at 	20-21; 	See 	19 	C.F.R.
§ 351.407(c). 11 	Commerce differentiates TPBI’s cited authority from
the 	present 	matter, 	stating 	that 	Commerce 	is 	not 	required 	to
conduct a factor by factor analysis in this case, as there is only
one product at issue. Def.’s Br. at 22-24. 	Commerce also relies on
its 	past 	decisions 	in 	support 	of 	its 	practice. 	I 	& 	D 	Mem. 	Cmt. 	1
at 11-12. 12
Despite TPBI’s argument that each of the cited cases is
distinguishable, 	Commerce 	analyzed 	TPBI’s 	costs 	in 	line 	with 	the
agency 	practice 	of 	considering 	whether 	costs 	are 	allocated
according to physical characteristics of the product as a primary
factor. Def.’s Br. at 17. 	Recognizing that the DIFMER adjustment
11 Commerce notes that in Certain Preserved Mushrooms from
India, 63 Fed. Reg. 72, 246 (Dep’t Commerce Dec. 31, 1998)
(notice of final determination of sales at less than fair value),
Commerce rejected the reported methodology because it may
consider other factors in analyzing the costs of production, but
that it is not obligated to do so. Def.’s Br. at 22-23.
12 Commerce states that the common thread in the three cited
cases is Commerce’s consistent actions in reallocating costs to
address distortions on the record. See Stainless Steel Bar from
the United Kingdom, 72 Fed. Reg. 43,598 (Dep’t Commerce Aug. 6,
2007) (final results of antidumping duty administrative review);
Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan,
64 Fed. Reg. 24,329 (Dep’t Commerce May 6, 1999) (notice of final
determination of sales at less than fair value); Small Diameter
Circular Seamless Carbon and Alloy Steel, Standard, Line and
Pressure Pipe from Brazil, 60 Fed. Reg. 31,960 (Dep’t Commerce
June 19, 1995) (notice of final determination of sales at less
than fair value).
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is 	a 	price 	adjustment, 	Commerce 	still 	found 	that 	using 	physical
characteristics 	was 	necessary 	for 	its 	analysis 	as 	the 	physical
differences 	influence 	the 	price 	of 	products. 	I 	& 	D 	Mem. 	Cmt. 	1
at 10 n.2; Def.’s Br. at 19-20. See also 19 C.F.R. 351.411(a)-(b).
Commerce notes that its regulations do not prohibit Commerce from
adjusting reported costs to ensure that there would not be a DIFMER
adjustment 	for 	conversion 	cost 	differences. 	I 	& 	D 	Mem. 	Cmt. 	1
at 13; PRCBC’s Resp. Br. at 14.
Commerce 	also 	counters 	TPBI’s 	argument 	that 	Commerce’s
costs reallocation was inappropriate because there was no evidence
of under-reporting. See TPBI’s Br. at 22. 	Commerce notes that it
is not required to wait for under-reporting before determining that
those costs did not reasonably reflect actual costs. Def.’s Br. at
24. 	Commerce 	found 	a 	distortion 	in 	that 	the 	reported 	conversion
costs were understated for some models and overstated for others;
resulting in the need to adjust the costs. I & D Mem. Cmt. 1 at 13;
Def.’s Br. at 25.
Thus, 	Commerce’s 	cost 	analysis 	in 	this 	fifth
administrative review is consistent with Commerce’s determination
in 	the 	fourth 	review, 	in 	which 	Commerce 	reasonably 	adjusted
reported 	costs 	to 	reasonably 	reflect 	actual 	costs. 	Thai 	Plastic
Bags I, 34 CIT at __, 752 F. Supp. 2d at 1328 n.28; Def.’s Br. at
26.
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Consol. Court No. 11-00086 	Page 18
C. 	Alternate Cost Methodology
In responding to Commerce’s request for cost data, TPBI
submitted two alternate sets of costs for its margin calculation,
both of which Commerce rejected, finding that they distorted TPBI’s
actual conversion costs. TPBI Pl.’s Br. at 15-16; Def.’s Br. at 29.
While 	Commerce 	may 	consider 	alternative 	methods, 	Commerce 	should
only choose such a method if it minimizes distortions. Def.’s Br.
at 	29-30; 	See 	also 	U.S. 	Steel 	Group 	v. 	United 	States, 	24 	CIT 	757
(2000); 19 C.F.R. § 351.407(c).
TPBI argues that Commerce should have used one of TPBI’s
two 	proposed 	cost 	allocation 	methodologies, 	as 	they 	were 	both
reasonable alternatives. TPBI’s Br. at 15-16. 	TPBI also claims –
without proof – that by using weight-averaging for all of its labor
and 	fixed 	and 	variable 	overhead 	costs, 	Commerce 	added 	more
distortions, not fewer. TPBI’s Br. at 31.
TPBI further argues that Commerce should have accorded it
a chance to correct any deficiency in its cost allocations and that
Commerce 	should 	not 	have 	applied 	“facts 	otherwise 	available.”
TPBI’s Br. at 32-33. See also 19 U.S.C. § 1677m(d)-(e) 13 ; 19 U.S.C.
13 (e) Use of certain information
In reaching a determination under section 1671b, 1671d,
1673b, 1673d, 1675, or 1675b of this title the
administering authority and the Commission shall not
decline to consider information that is submitted by an
interested party and is necessary to the determination
but does not meet all the applicable requirements
established by the administering authority or the
(continued...)
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Consol. Court No. 11-00086 	Page 19
§ 	1677e(a). 	TPBI 	also 	asserts 	that 	its 	cost 	information 	can 	be
used without undue difficulty because Commerce’s analysis is flawed
and TPBI’s information is more reasonable. TPBI’s Br. at 32.
Commerce’s 	conclusion, 	however 	— 	“that 	it 	was 	more
important to use a cost allocation methodology that diminished the
possibility 	of 	extreme 	undervaluation 	or 	overvaluation, 	even 	if
that 	meant 	that 	a 	DIFMER 	adjustment 	could 	not 	be 	made[,]” 	Def.’s
Br. 	at 	31; 	I 	& 	D 	Mem. 	Cmt. 	1 	at 	12 	– 	was 	not 	unreasonable.
Commerce correctly states that after finding TPBI’s methodologies
to be distortive, Commerce was under no obligation to utilize them.
Def.’s 	Br. 	at 	29; 	I 	& 	D 	Mem. 	Cmt. 	1 	at 	13 	- 	14. 	In 	addition,
Commerce 	reasonably 	found 	that 	there 	was 	an 	undue 	difficulty 	as
13 (...continued)
Commission, if—
(1) the information is submitted by the deadline
established for its submission,
(2) the information can be verified,
(3) the information is not so incomplete that it cannot
serve as a reliable basis for reaching the applicable
determination,
(4) the interested party has demonstrated that it acted
to the best of its ability in providing the information
and meeting the requirements established by the
administering authority or the Commission with respect
to the information, and
(5) the information can be used without undue
difficulties.
19 U.S.C. § 1677m(e).
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Consol. Court No. 11-00086 	Page 20
well 	as 	a 	distortion 	in 	Plaintiff’s 	cost 	allocations. 	I 	& 	D 	Mem.
at 14.
Moreover, despite TPBI’s contention that it was not
notified, TPBI’s Br. at 33, Commerce did notify Plaintiff when it
rejected its method in the fourth review and issued supplemental
questionnaires. Def.’s Br. at 6-7, 32; Id. Ex. E at SID-2.
Based on the record here, Commerce reasonably found
Plaintiff’s methodologies to be distortive. 	Commerce’s
determination on this issue is therefore affirmed.
II. 	TPBI Issue 2: Zeroing
Where imported goods are being sold in the United States
at less than fair value and to the detriment of domestic industry,
the statute directs Commerce to impose an antidumping duty on those
imported 	goods 	“equal 	to 	the 	amount 	by 	which 	the 	normal 	value
exceeds the export price (or the constructed export price) for the
merchandise.” 19 U.S.C. § 1673. 14
Here 	Commerce 	applied 	its 	“zeroing” 	methodology 	in
arriving at Plaintiff’s weighted-average dumping margins. 15 	In the
14 “Dumping margin” is defined as “the amount by which the
normal value exceeds the export price or constructed export
price.” 19 U.S.C. § 1677(35)(A). 	Weighted average dumping margin
is defined as “the percentage determined by dividing the
aggregate dumping margins determined for a specific exporter or
producer by the aggregate export prices and constructed export
prices of such exporter or producer.” 19 U.S.C. § 1677(35)(B).
15 Zeroing refers to the method used by Commerce to
aggregate positive margins (margins for sales of merchandise sold
(continued...)
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Consol. Court No. 11-00086 	Page 21
administrative review, TPBI argued that zeroing in this context was
incorrect, because the World Trade Organization (“WTO”) has ruled
against this practice. TPBI Case Br. at 59.
Before the court, TPBI contends, based on current law,
that “Commerce failed to explain why its inconsistent statutory
interpretation [i.e., differing in administrative reviews from
the interpretation applied in investigations] with regard to
zeroing is reasonable., TPBI Pl.’s Br. at 36, and that the court
should remand because Commerce must either explain its
inconsistent interpretation of 19 U.S.C. § 1677(35) or adopt a
consistent interpretation for both investigations and reviews.
TPBI Pl.’s Br. 36-37.
Commerce argues that denying offsets and applying zeroing
serves the policy rationale of combating masked dumping. I & D Mem.
Cmt. 	4 	at 	22. 	In 	addition, 	Commerce 	contends 	that 	Plaintiff 	has
failed to exhaust its administrative remedies because Plaintiff did
15 (...continued)
at dumped prices)and give a value of zero for negative margins
(margins for sales of merchandise sold at non-dumped prices).
Dongbu Steel Co. v. United States, 635 F.3d 1363, 1366 (Fed. Cir.
2010).
When calculating weighted average dumping margins,
Commerce may employ either of two methodologies: zeroing or
offsetting. Timken Co. v. United States, 354 F.3d 1334, 1341–45
(Fed. Cir. 2004) (holding that 19 U.S.C. § 1677(35) is ambiguous
and that zeroing is a reasonable interpretation); U.S. Steel
Corp. v. United States, 621 F.3d 1351, 1360–63 (Fed. Cir. 2010)
(holding that 19 U.S.C. § 1677(35) is ambiguous and that
offsetting is also a reasonable interpretation).
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Consol. Court No. 11-00086 	Page 22
not rely in its briefing on Commerce’s differing interpretations of
19 	U.S.C. 	§ 	1677(35) 	in 	the 	context 	of 	administrative 	reviews 	as
opposed to investigations, or regarding average to transaction and
average 	to 	average 	comparison 	methods, 	respectively. 	Def.’s 	Br.
at 34.
Despite 	arguing 	that 	Plaintiff 	has 	not 	exhausted 	its
administrative remedies here, that the Federal Circuit has already
rejected TPBI’s argument regarding WTO related activities, and that
exhausting remedies would not have been futile, in the alternative,
Commerce requests a remand. Def.’s Br. at 34, 37. 16 	The court will
grant 	this 	request. 17 	Here, 	the 	briefing 	in 	the 	administrative
review occurred before the parties had sufficient time to consider
the Federal Circuit’s decision in Dongbu. 	Commerce will now have
the 	opportunity 	to 	fully 	explain 	its 	reasoning 	regarding 	the
16 See Grobest & I-Mei Indus. (Vietnam) Co., Ltd. v. United
States, 36 CIT __, 	815 F. Supp. 2d 1342, 1348-50. (2012).
17 Two recent decisions from the Court of Appeals for the
Federal Circuit guide this court’s decision of this issue: Dongbu
Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir. 2011) and
JTEKT Corp. v. United States, 642 F.3d 1378 (Fed. Cir. 2011),
which addressed Commerce’s inconsistent interpretations of 19
U.S.C. § 1677(35). 	Dongbu held that “[i]n the absence of
sufficient reasons for interpreting the same statutory provision
inconsistently, Commerce’s action is arbitrary.” 635 F.3d
at 1372–73.
Subsequently, JTEKT concluded that “[w]hile Commerce
did point to differences between investigations and
administrative reviews, it failed to address the relevant
question — why is it a reasonable interpretation of the statute
to zero in administrative reviews, but not in investigations?”
642 F.3d at 1384.
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Consol. Court No. 11-00086 	Page 23
zeroing issue. 18 See also Union Steel v. United States, 35 CIT __,
804 	F. 	Supp. 	2d 	1356, 	1367-68 	(2011) 	(“The 	court 	concludes, 	upon
reconsidering its decision in Union II, that it is appropriate to
set 	aside 	its 	affirmance 	of 	the 	use 	of 	zeroing 	and 	to 	direct
Commerce 	to 	provide 	the 	explanation 	contemplated 	by 	the 	Court 	of
Appeals in Dongbu and JTEKT Corp.”).
III. 	PRCBC Issue 3: Transactions-Disregarded Rule
During the POR, TPBI purchased three types of resin 19 from
suppliers (both affiliated and unaffiliated). TPBI’s Supp. Section
D Resp., A-549-821, ARP 08-09 (Mar. 22, 2010), Admin. R. Con. Doc.
14 	[Pub. 	Doc. 	55] 	at 	Ex. 	S1D-3 	(“Supp. 	Resp. 	1"). 	In 	its
Preliminary Results, Commerce determined that TPBI purchased resin
from 	an 	affiliated 	supplier. 	Prelim. 	Results, 	75 	Fed. 	Reg.
at 53,955; Def.’s Br. at 42. 	Commerce then applied the major input
rule 20 	and 	adjusted 	the 	COM 	to 	reflect 	the 	market 	value 	of 	the
18 As the decision in Dongbu was not available prior to the
Final Results in this administrative review, the court does not
credit Commerce’s exhaustion argument. See JTEKT, 642 F.3d
at 1384 (“[Appellant] did not have the benefit of the Dongbu
opinion before filing its briefs and thus could not have argued
that the case requires us to vacate, but it nonetheless preserved
the issue on appeal by arguing that Commerce’s continuing
practice of zeroing in administrative reviews, but not in
investigations, is unreasonable.”).
19 [[ 	]]
20 The AD Statute defines the major input rule as follows:
If, in the case of a transaction between affiliated
persons involving the production by one of such persons
(continued...)
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Consol. Court No. 11-00086 	Page 24
resin. 	Id. 	Commerce 	then 	compared 	only 	the 	transfer 	prices 	and
purchases of LLD resin from the affiliated Supplier. See I & D Mem.
Cmt. 2 at 18–19; Def.’s Br. at 42.
More 	specifically, 	in 	adjusting 	the 	COM, 	Commerce
compared 	the 	transfer 	price 	of 	LLD 	resin 	with 	the 	arm’s-length
transaction 	price 	of 	LLD 	resin. 	See 	Prelim. 	Cost 	Mem. 	at 	4.
Commerce 	thus 	compared 	purchases 	separately 	for 	a 	specific 	resin
type. 	Id.; 	Br. 	of 	PRCBC 	in 	Support 	of 	Mot. 	for 	J. 	on 	Agency 	R.
at 11-12, ECF No. 49 (“PRCBC’s Br.”).
However, 	in 	the 	Final 	Results, 	Commerce 	changed 	its
methodology and used the transactions-disregarded rule, 21 comparing
20 (...continued)
of a major input to the merchandise, the administering
authority has reasonable grounds to believe or suspect
that an amount represented as the value of such input
is less than the cost of production of such input, then
the administering authority may determine the value of
the major input on the basis of the information
available regarding such cost of production, if such
cost is greater than the amount that would be
determined for such input under paragraph (2).
19 U.S.C. § 1677b(f)(3).
21 A transaction directly or indirectly between
affiliated persons may be disregarded if, in the case
of any element of value required to be considered, the
amount representing that element does not fairly
reflect the amount usually reflected in sales of
merchandise under consideration in the market under
consideration. If a transaction is disregarded under
the preceding sentence and no other transactions are
available for consideration, the determination of the
amount shall be based on the information available as
to what the amount would have been if the transaction
(continued...)
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Consol. Court No. 11-00086 	Page 25
average transfer and market prices across all types of resin; even
though 	the 	parties 	did 	not 	argue 	for 	revising 	the 	level 	of
specificity 	at 	which 	to 	apply 	the 	transactions 	disregarded 	rule.
PRCBC’s Br. at 11-12; I & D Mem. at 19. 22
TPBI, 	as 	a 	respondent, 	argued 	that 	Commerce 	should 	not
have applied the major input rule because the affiliated supplier
was not a resin manufacturer. See TPBI’s Case Br. at 50-51, 59.
PRCBC 	argues 	that 	the 	court 	should 	remand 	this 	issue,
stating 	that 	Commerce 	changed 	its 	analysis 	for 	the 	Final 	Results
without providing an avenue for comments by the interested parties
or 	a 	chance 	for 	Commerce 	to 	consider 	those 	comments. 	PRCBC’s 	Br.
at 11-15. 	Commerce now agrees. Def.’s Br. at 41.
As 	an 	agency 	may 	request 	a 	remand 	to 	reconsider 	its
position, SKF USA, Inc. v. United States, 254 F.3d 1022, 1028 (Fed.
Cir. 2001), the court will remand this issue so that Commerce can
(...continued)
had occurred between persons who are not affiliated.
19 U.S.C. § 1677b(f)(2).
22 For the Final Results, Commerce revised its preliminary
results and changed the analysis for TPBI’s affiliated resin
input purchases to “include all purchases of resin that TPBI made
during the POR.” Final Cost Mem., A-549-821, ARP 08-09 (Mar. 1,
2011), Admin. R Con. Doc. 47 [Pub. Doc. 137] at 1-2, Pub. Doc. 47
(March 1, 2011). 	PRCBC notes that because Commerce ultimately
decided to apply only the transactions disregarded rule, which
does not depend upon whether a raw material is a “major output,”
that TPBI’s argument regarding whether resin was a major input is
moot. PRCBC’s Br. at 12 n.5; see also I & D Mem. at 18-19.
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Consol. Court No. 11-00086 	Page 26
give the parties the proper opportunity to comment. 23
IV. 	PRCBC Issue 4 : Inventory-Valuation Losses
Under the statute, the calculation of COP includes an
amount for general and administrative (“G&A”) expenses. 24
Commerce’s practice is to include inventory valuation losses in
G&A expenses except for those losses relating to finished good’s
inventories. Def.’s Br. at 38; Stainless Steel Wire Rod from the
Republic of Korea, 69 Fed. Reg. 19,153, 19,161 (Dep’t Commerce
Apr. 12, 2004) (final results of antidumping duty administrative
review) and accompanying Issues and Decision Memorandum, A-580-
829, ARP 01-02 (Apr. 5, 2004) Cmt. 7; PRCBC’s Br. at 15.
Here, Commerce did not include inventory-valuation losses
in TPBI’s G&A expenses. See Pet’rs’ Case Br., A-549-821, ARP 08-09
23 The court notes that Commerce must require a cost
adjustment for materials purchased from an affiliated supplier at
below market price, see 19 U.S.C. § 1677b(f)(2), but this
regulation is silent on what price data Commerce should use in
applying the transactions-disregarded rule.
While no regulation directly addresses this issue,
Commerce’s adjustment in the Final Results appears contrary to
its past practice. 	In Certain Pasta from Italy, Commerce limited
its cost adjustment analysis to a comparison of the weighted-
average transfer price for semolina from affiliated suppliers to
the arms-length price for this input. 69 Fed. Reg. 6,255, 6,257
(Dep’t Commerce Feb. 10, 2004) (notice of final results of the
sixth administrative review of the antidumping order) and
accompanying Issues and Decision Memorandum, A-475-818, ARP 01-02
(Feb. 3, 2004) Cmt. 32. 	In applying the transactions-disregarded
rule, Commerce did not include all purchases from the affiliated
supplier but only took into account the input at issue. Id.
24 G&A expenses are expenses incurred in running a business,
as distinguished from expenses incurred in manufacturing or
selling. Black’s Law Dictionary 618 (8th ed. 2004).
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Consol. Court No. 11-00086 	Page 27
(Dec. 	10, 	2010), 	Admin. 	R. 	Con. 	Doc. 	41 	[Pub. 	Doc. 	126] 	at 	4.
PRCBC 	contends 	that 	Commerce’s 	finding 	that 	TPBI’s 	inventory
valuation losses were attributable to finished goods inventory, and
thus excluded from G&A expenses, was unreasonable. PRCBC’s Br. at
16. 	PRCBC argues that instead these losses should have been part
of the cost of production. PRCBC’s Br. at 18.
However, because Commerce may exercise its authority to
draw 	reasonable 	inferences 	from 	the 	record, 	Daewoo 	Elecs. 	Co. 	v.
Int’l 	Union 	of 	Electronic 	Elec., 	Technical, 	Salaried 	and 	Mach.
Workers, AFL-CIO, 6 F.3d 1511, 1520 (Fed. Cir. 1993); Grobest, 36
CIT at __, 815 F. Supp. 2d at 1356 (2012), Commerce’s determination
that Plaintiff’s inventory-valuation losses should be excluded from
the cost calculations was supported by the record.
In its determination, Commerce concluded that TPBI’s 2009
inventory losses should be excluded because the evidence suggested
that these reported losses were related to finished goods. Def.’s
Br. 	at 	38; 	I 	& 	D 	Mem. 	Cmt. 	6 	at 	26. 	PRCBC 	claims 	that 	Commerce
relied upon evidence that cannot support its determination. PRCBC’s
Br. at 16-17. 25 	Specifically, PRCBC argues that, as no amount for
inventory valuation losses was explicitly listed in the statement
of 	administrative 	expenses, 	Commerce’s 	determination 	was 	not
25 TPBI had changed its inventory losses accounting between
2008-2009 and submitted comparative 2009 schedules showing that
the 2008 inventory valuation losses related to finished goods.
Def.’s Br. at 38-39.
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Consol. Court No. 11-00086 	Page 28
reasonable. PRCBC’s Br. at 18-19.
However, 	in 	the 	Final 	Results, 	Commerce 	reasonably
articulated 	its 	basis 	for 	excluding 	TPBI’s 	inventory-valuation
losses 	from 	the 	G&A 	expenses. 	See 	I 	& 	D 	Mem. 	Cmt. 	6 	at 	26.
Commerce explained that TPBI provided documentary support to show
that 	its 	2008 	inventory-losses 	related 	to 	finished 	goods. 26 	Id.
TPBI 	also 	reconciled 	the 	2009 	data 	with 	the 	2008 	data. 	See
Submission of 2009 Financial Statements, A-549-821, ARP 08-09 (July
7, 2010) Admin. R. Con. Doc. 25 [Pub. Doc. 84], Ex. Supp-1 at 17,
25. 	Thus, while PRCBC is correct that there was no express listing
for 	finished 	goods 	in 	the 	2009 	data, 	this 	does 	not 	topple 	the
totality 	of 	Commerce’s 	reasoning, 	including 	the 	record 	evidence
that the 2008 inventory valuation losses were related to finished
goods.
Commerce 	cites 	to 	record 	evidence 	to 	bolster 	its 	claim
that 	TPBI’s 	reported 	inventory 	valuation 	losses 	were 	related 	to
finished goods. 	In particular, in its responses to Commerce, TPBI
stated that during the POR it had raw materials, work-in-progress
and finished goods in inventory and that raw materials and work-in-
progress 	were 	valued 	at 	actual 	cost, 	whereas 	finished 	goods 	were
valued 	at 	actual 	cost 	or 	net 	realizable 	value 	at 	year’s 	end,
depending 	on 	which 	was 	lower. 	Def.’s 	Br. 	Ex. 	B 	at 	D-11; 	Def.’s
26 In its response to Supplemental D Questionnaire, TPBI
stated that there were write-downs for finished goods but not raw
materials or WIPs. See Supp. Resp. 1 at 10.
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Consol. Court No. 11-00086 	Page 29
Ex. F at S4D-2 to S4D-3; Def.’s Br. at 39-40.
TPBI 	provided 	documentation 	showing 	that 	an 	inventory
valuation loss from 2008 27 was attributable to finished goods. Supp.
Resp. 1 at Ex. S1D-10; PRCBC’s Br. at 16. 	This same loss appears
in 	the 	comparative 	schedule 	in 	the 	2009 	financial 	statements.
TPBI’s Supp. Section D Resp., A-549-821, ARP 08-09 (July 26, 2010),
Admin. 	R. 	Con. 	Doc. 	27 	[Pub. 	Doc. 	90] 	Ex. 	S4D2-1, 	at 	17 	(“Supp.
Resp. 	2"); 	PRCBC’s 	Br. 	at 	16. 	PRCBC 	argues 	that 	this 	is 	not
evidence 	that 	TPBI’s 	2009 	inventory 	valuation 	losses 28 	are 	also
related to finished goods, as they may also be attributable to raw
materials and works-in-progress. PRCBC’s Br. at 16-17; Supp. Resp.
2 Ex. S4D2-1 at 11 n.3.
PRCBC 	also 	states 	that 	even 	though 	the 	2008 	to 	2009
change in inventory valuation losses was identified, 29 and that this
same amount appears in the cost reconciliation, 30 that this does not
provide 	enough 	information 	to 	conclude 	whether 	the 	loss 	is
attributable to finished goods, WIP or RM. PRCBC’s Br. at 17; Supp.
Resp. 2 Ex. S4D2-1 at 17; TPBI’s Supp. Section D Resp., A-549-821,
ARP 	08-09 	(Aug. 	18, 	2010), 	Admin. 	R. 	Con. 	Doc. 	32 	[Pub. 	Doc. 	99]
27 [[ 	]] baht.
28 [[ 	]] baht.
29 [[ 	]] baht.
30 Under the item [[
]].
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Consol. Court No. 11-00086 	Page 30
Ex. 	S5D1 	worksheet 	D 	at 	2. 	PRCBC 	claims 	that 	it 	is 	Commerce’s
obligation to deny the adjustment instead of assuming that the 2009
losses should be excluded from normal value. PRCBC’s Br. at 18; 19
C.F.R. § 351.401(b)(1). 31
Commerce 	counters 	that 	in 	analyzing 	the 	inventory
valuation 	loss 	for 	2009, 	it 	looked 	to 	the 	statement 	of
administrative expenses, which showed TPBI’s report of a loss from
a 	cost 	higher 	than 	net 	realizable 	value 	for 	finished 	goods 	as 	a
2008 	administrative 	expense, 	but 	that 	no 	amount 	for 	2009 	was
reported. Def.’s Br. at 40; Def’s Br. Ex. F; I & D Mem. at 26.
In 	addition, 	in 	responding 	to 	a 	questionnaire 	on 	the
issue, TPBI explained that there was a “roll-up into COGS (costs of
goods sold) of all the relevant cost elements[.]” Def.’s Br. Ex. F
at S4D-5. 32 	TPBI also later submitted a cost reconciliation. Def.’s
Br. Ex. G at S5D-1.
As Commerce may make reasonable inferences based on the
record, “[t]he specific determination [the court] make[s] is
‘whether the evidence and reasonable inferences from the record
31 PRCBC notes that TPBI did not address and Commerce
ignored the fact that the line item entitled [[
]] shows a [[ 	]] value
for 2009. Supp. Resp. 2 at Ex. S4D2-1 (CR 17); PRCBC’s Br. at 18.
The court notes that this line is [[ 	]].
32 While the 2008 chart reported no amount for “loss from
cost higher than net realizable value,” Def.’s Br. Ex. F, the
2009 chart reported an amount under the same heading. Def.’s Br.
Ex. G. at SD5-6; Def.’s Br. at 41.
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Consol. Court No. 11-00086 	Page 31
support the [Commerce’s] finding.’. The question is whether the
record adequately supports the decision of the [Department], not
whether some other inference could reasonably have been drawn.”
Daewoo Elecs., 6 F.3d at 1520 (citation omitted) (quoting
Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933
(Fed. Cir. 1984)).
Even if PRCBC posits evidence that may detract from
Commerce’s determination, PRCBC’s Br. at 18, just because there
are alternative inferences that could be drawn does not mean that
Commerce was unreasonable. Goldlink Indus. Co. v. United States,
30 CIT 616, 619, 431 F. Supp. 2d 1323, 1327 (2006) (“The Court's
role in the case at bar is not to evaluate whether the
information Commerce used was the best available, but rather
whether a reasonable mind could conclude that Commerce chose the
best available information.”)
Based on the foregoing record evidence, including
TPBI’s past treatment of such losses and its responses to
Commerce, it is reasonable for Commerce, to infer that the 2009
inventory-valuation losses related to finished goods. 	Commerce’s
decision to exclude inventory-valuation losses is therefore
supported by substantial evidence and will be affirmed.
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Consol. Court No. 11-00086 	Page 32
CONCLUSION
For the reasons discussed above, the court grants
Plaintiffs’ motions regarding issues two and three. 	The Final
Results are otherwise affirmed in all respects.
Commerce shall have until August 17, 2012 to complete
and file its remand redetermination. 	Both Plaintiffs shall have
until August 31, 2012 to file comments. 	Defendant shall have
until September 14, 2012 to file any reply. 	Plaintiffs, also by
September 14, 2012, may each reply to the other’s comments.
It is SO ORDERED.
/s/ Donald C. Pogue
Donald C. Pogue, Chief Judge
Dated: June 18, 2012
New York, N.Y.
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