Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. v. United States

Slip Op. 19-10
UNITED STATES COURT OF INTERNATIONAL TRADE
+$%$ù SINAI VE TIBBI GAZLAR
ISTIHSAL ENDÜSTRISI, $ù,
Plaintiff,
and
ICDAS CELIK ENERJI TERSANE VE
ULASIM SANAYI, A.S.,
Consolidated Plaintiff,
v.
UNITED STATES,
Defendant,
and
REBAR TRADE ACTION COALITION,
Defendant-Intervenor.
Before: Mark A. Barnett, Judge
Consol. Court No. 17-00204
PUBLIC VERSION
OPINION AND ORDER
[The U.S. Department of Commerce’s Final Determination is remanded with respect to
the agency’s duty drawback adjustment and application of partial adverse facts
available to Consolidated Plaintiff; the Final Determination is sustained in all other
respects.]
Dated: January 23, 2019
David L. Simon, Law Office of David L. Simon, of Washington, DC, argued for Plaintiff.
Nancy Noonan, Arent Fox, LLP, of Washington, DC, argued for Consolidated Plaintiff.
With her on the brief were Matthew M. Nolan and Leah N. Scarpelli.
Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the
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brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief was David
W. Richardson, Attorney, Office of the Chief Counsel for Trade Enforcement and
Compliance, U.S. Department of Commerce, of Washington, DC.
John R. Shane and Maureen E. Thorson, Wiley Rein LLP, of Washington, DC, argued
for Defendant-Intervenor. With them on the brief was Alan H. Price.
Barnett, Judge: Plaintiff +DEDú Sinai ve Tibbi Gazlar ,VWLKVDO(QGVWULVL$ù
(“+DEDú”) and Consolidated Plaintiff Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S.
(“Icdas”) (together, “Plaintiffs”) challenge the U.S. Department of Commerce’s
(“Commerce” or the “agency”) final affirmative determination in the sales at less than fair
value investigation of steel concrete reinforcing bar (“rebar”) from the Republic of
Turkey (“Turkey”). 1 See Steel Concrete Reinforcing Bar From the Republic of Turkey,
82 Fed. Reg. 23,192 (Dep’t Commerce May 22, 2017) (final determination of sales at
less than fair value) (“Final Determination”), ECF No. 17-5, as amended by Steel
Concrete Reinforcing Bar From the Republic of Turkey and Japan, 82 Fed. Reg. 32,532
(Dep’t Commerce July 14, 2017) (am. final affirmative antidumping duty determination
for the Republic of Turkey and antidumping duty orders) (“Am. Final Determination”),
ECF No. 17-7, and accompanying Issues and Decision Mem., A-489-829 (May 15,
2017) (“I&D Mem.”), ECF No. 17-6.
1 The administrative record is divided into a Public Administrative Record (“PR”), ECF
No. 17-1, and a Confidential Administrative Record (“CR”), ECF No. 17-2. Parties
submitted joint appendices containing all record documents cited in their briefs. See
Public J.A. (“PJA”), ECF No. 51; Confidential J.A. (“CJA”), ECF No. 50; Suppl.
Confidential J.A. (“Suppl. CJA”), ECF No. 56; Suppl. Public J.A. (“Suppl. PJA”), ECF
No. 57. The court references the confidential versions of record documents, unless
otherwise specified.
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Plaintiffs challenge several aspects of the Final Determination. 2 See Confidential
Pl.’s Rule 56.2 Mot. for J. on the Agency R. and Mem. in Supp. of Mot. of Pl. +DEDú
6LQDLYH7LEEL*D]ODU,VWLKVDO(QGVWULVL$ù, for J. on the Agency R. Pursuant to Rule
56.2 (“+DEDú’s Mem.”), ECF No. 22; Confidential Mot. for J. on the Agency R., ECF No.
24, and Confidential Pl. Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S.’s Mem. of
Law in Supp. of Mot. for J. on the Agency R. Pursuant to Rule 56.2 (“Icdas’s Mem.”),
ECF No. 29. +DEDú and Icdas challenge Commerce’s calculation of their respective
duty drawback adjustments and refusal to use a quarterly cost-averaging methodology
in the determination of normal value. See +DEDú’s Mem. at 4-25; Icdas’s Mem. at 9-31.
+DEDú challenges Commerce’s selection of the invoice date as the date of sale for its
U.S. sales and rejection of its zero-interest short-term loans to calculate imputed credit
expenses. +DEDú’s Mem. at 25-39. Icdas challenges Commerce’s use of partial
adverse facts available in relation to certain sales for which it could not provide
manufacturer codes. Icdas’s Mem. at 31-36. 3 Defendant United States (“Defendant” or
the “Government”) and Defendant-Intervenor Rebar Trade Action Coalition (“Defendant-
Intervenor” or “RTAC”) urge the court to sustain Commerce’s Final Determination in full.
See Confidential Def.’s Resp. to Pls.’ Mots. for J. Upon the Agency R. (“Def.’s Resp.”),
ECF No. 37; Confidential Resp. Br. of Def.-Int. Rebar Trade Action Coalition (“Def.-Int.’s
Resp.”), ECF No. 40.
2 Because the Am. Final Determination simply corrected ministerial errors, 82 Fed. Reg.
at 32,532-33, Plaintiffs direct their challenges to the Final Determination.
3 At oral argument, Icdas abandoned its challenge to Commerce’s rejection of untimely
information.
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For the reasons discussed herein, the court remands Commerce’s calculation of
Plaintiffs’ duty drawback adjustment and application of partial adverse facts available to
Icdas. The court sustains the Final Determination in all other respects.
B ACKGROUND
On October 18, 2016, Commerce initiated this antidumping duty investigation of
rebar from Turkey in response to a petition filed by RTAC and the domestic rebar
producers that constitute RTAC’s individual members. See Steel Concrete Reinforcing
Bar From Japan, Taiwan and the Republic of Turkey, 81 Fed. Reg. 71,697 (Dep’t
Commerce Oct. 18, 2016) (initiation of less-than-fair-value investigations), PR 28, PJA
Tab 1. Commerce selected +DEDú and Icdas as mandatory respondents in the
investigation. I&D Mem. at 1. The period of investigation (“POI”) ran from July 1, 2015
to June 30, 2016. Final Determination, 82 Fed. Reg. at 23,192.
On March 7, 2017, Commerce issued its preliminary determination. See Steel
Concrete Reinforcing Bar From the Republic of Turkey, 82 Fed. Reg. 12,791 (Dep’t
Commerce Mar. 7, 2017) (“Prelim. Determination”), and accompanying Prelim. Decision
Mem., A-489-829 (Feb. 28, 2017) (“Prelim. Mem.”), PR 161, PJA Tab 30. Commerce
preliminarily calculated a weighted-average dumping margin of 5.29 percent for +DEDú
and 7.07 percent for Icdas. Prelim. Determination, 82 Fed. Reg. at 12,792.
On May 22, 2017, Commerce issued the Final Determination. 82 Fed. Reg. at
23,192. Commerce issued an amended final determination on July 14, 2017. See Am.
Final Determination, 82 Fed. Reg. at 32,532. Therein, Commerce calculated a
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weighted-average dumping margin of 5.39 percent for +DEDú and 9.06 percent for
Icdas. Id., 82 Fed. Reg. at 32,533.
On July 31, 2017, +DEDú timely commenced this action. See Summons, ECF
No. 1. On August 11, 2017, Icdas timely commenced a separate action also
challenging the Final Determination. See Summons, ECF No. 1 (Court No. 17-00218).
On October 5, 2017, the court consolidated the two actions under lead Court No. 17-
00204. See Order (Oct. 5, 2017), ECF No. 15. The court heard oral argument on
November 29, 2018. See Docket Entry, ECF No. 58. 4
J URISDICTION AND S TANDARD OF REVIEW
The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012), 5 and 28 U.S.C. § 1581(c) (2012).
The court will uphold an agency determination that is supported by substantial evidence
and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “Substantial
evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d
4 Additional issue-specific background information is contained in the Discussion.
5 All citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. Code,
and references to the U.S. Code are generally to the 2012 edition. However, The Trade
Preferences Extension Act (“TPEA”), Pub. L. No. 114–27, § 502, 129 Stat. 362, 383–84
(2015), made several amendments to the antidumping and countervailing duty laws.
Section 502 of the TPEA amended 19 U.S.C. § 1677e, and section 504 amended 19
U.S.C. § 1677b. See TPEA §§ 502, 504. These TPEA amendments affect all
antidumping duty determinations made on or after August 6, 2015. See Dates of
Application of Amendments to the Antidumping and Countervailing Duty Laws Made by
the Trade Preferences Extension Act of 2015, 80 Fed. Reg. 46,793 (Dep’t Commerce
Aug 6, 2015). Accordingly, all references to 19 U.S.C. §§ 1677e and 1677b are to the
amended version of the statutes.
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1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB., 305 U.S. 197, 229
(1938)). Substantial evidence “requires more than a mere scintilla,” but “less than the
weight of the evidence.” Nucor Corp. v. United States, 34 CIT 70, 72, 675 F. Supp. 2d
1340, 1345 (2010). The court may not “reweigh the evidence or . . . reconsider
questions of fact anew.” Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369,
1377 (Fed. Cir. 2015).
DISCUSSION
I. 	Duty Drawback
A. Background
To determine whether the subject merchandise is being sold at less than fair
value, Commerce compares the export price (“EP”) or constructed export price (“CEP”) 6
of the subject merchandise to its normal value (“NV”). See generally 19 U.S.C. § 1673
et seq. Generally, an antidumping duty is the amount by which the normal value of a
product—generally, its price in the exporting country—exceeds export price, as
adjusted. See id. § 1673. One of the adjustments Commerce makes to export price
pursuant to 19 U.S.C. § 1677a(c) is known as the “duty drawback adjustment.”
Specifically, Commerce will increase export price by “the amount of any import duties
imposed by the country of exportation which have been rebated, or which have not
6 U.S. price may consist of an export price or a constructed export price. Because the
distinctions between export price and constructed export price are not at issue in this
case, the court will refer only to export price. Such references, however, may be
understood as including constructed export price.
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been collected, by reason of the exportation of the subject merchandise to the United
States.” Id. § 1677a(c)(1)(B).
This statutory duty drawback adjustment is intended to prevent the dumping
margin from being increased by import taxes that are imposed on raw materials used to
produce subject merchandise, but which are rebated or exempted from payment when
the subject merchandise is exported to the United States. See Saha Thai Steel Pipe
(Public) Co. Ltd. v. United States, 635 F.3d 1335, 1338 (Fed. Cir. 2011); Wheatland
Tube Co. v. United States, 30 CIT 42, 60, 414 F. Supp. 2d 1271, 1286 (2006), rev'd on
other grounds, 495 F.3d 1355 (Fed. Cir. 2007). The adjustment accounts for the fact
that producers are subject to the import duty when merchandise is sold in the home
market, “which increases home market sales prices and thereby increases [normal
value].” Saha Thai, 635 F.3d at 1338. The statute increases constructed export price
“to the level it likely would be absent the duty drawback” to prevent the absence of
import duties from generating or increasing any dumping margin. Id.
Commerce has developed a two-prong test to determine whether a respondent is
entitled to a duty drawback adjustment: first, “that the exemption [from import duties] is
linked to the exportation of subject merchandise”; and second, “that there [were]
sufficient imports of the raw material to account for the duty drawback on the export of
subject merchandise.” I&D Mem. at 12; see also Saha Thai, 635 F.3d at 1340 (affirming
the lawfulness of Commerce's two-prong test).
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Commerce determined that Plaintiffs had demonstrated their entitlement to the
duty drawback adjustment. I&D Mem. at 12. 7 At issue, however, is Commerce’s
method of calculating the adjustment.
Until recently, Commerce calculated the duty drawback adjustment to U.S. price
(referred to as the sales-side adjustment) by dividing rebated or exempted duties by
total exports and adding the resultant per unit duty burden to the export price. See
Rebar Trade Action Coalition v. United States (“RTAC I”), Slip Op. 15-130, 2015 WL
7573326, at *4 (CIT Nov. 23, 2015) (granting Commerce’s request for a voluntary
remand to reconsider the sales-side adjustment methodology as set forth in the Issues
and Decision Mem. for the Final Negative Determination in the Less than Fair Value
Investigation of Steel Concrete Reinforcing Bar from Turkey, A-489-818 (Sept. 8, 2014)
(“Rebar from Turkey Mem.”)).
When producers participate in a duty exemption program, Commerce also makes
a corresponding upward adjustment to the cost of production (“COP”) and constructed
value (“CV”) (referred to as the cost-side adjustment) 8 to account for the cost of the
7 Pursuant to Turkish law, Plaintiffs are relieved from the payment of import duties on
certain inputs used in the production of (exported) subject merchandise. See Sec. C
Questionnaire Resp. RI+DEDú -DQ  ³+DEDú†&45´ DW 32-33, CR 69-75, PR
91, CJA Tab 11, PJA Tab 11.
8 Commerce calculates normal value using sales in the home market that are at or
above the cost of production. 19 U.S.C. § 1677b(b)(1). When there are no such sales,
Commerce calculates normal value “based on the constructed value of the
merchandise.” Id. The cost of production includes “the cost of materials and of
fabrication or other processing” used in manufacturing; “selling, general, and
administrative expenses”; and the cost of packaging. Id. § 1677b(b)(3). Constructed
value includes similar expenses and an amount for profit. Id. § 1677b(e).
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unpaid import duties for which the producer remains liable until the merchandise
containing the dutiable input(s) is exported and the exemption program requirements
are satisfied. See Saha Thai, 635 F.3d at 1341-44. In affirming Commerce’s inclusion
of implied duty costs in its calculations, the Saha Thai court reasoned that the purpose
of the statutory increase to export price “is to account for the fact that the import duty
costs are reflected in . . . home market sales prices[] but not . . . sales prices in the
United States[].” Id. at 1342. Thus, “[i]t would be illogical to increase EP to account for
import duties that are purportedly reflected in NV, while simultaneously calculating NV
based on a COP and CV that do not reflect those import duties.” Id. Accordingly,
“[u]nder the ‘matching principle,’ EP, COP, and CV should be increased together, or not
at all.” 9 Id. at 1342-43. 10
In 2016, on remand pursuant to RTAC I, Commerce modified its sales-side
adjustment by allocating exempted duties over total production rather than exports. See
Rebar Trade Action Coalition v. United States (“RTAC II”), Slip Op. 16-88, 2016 WL
5122639, at *3 (CIT Sept. 21, 2016); Final Results of Redetermination Pursuant to
Court Remand, Consol. Ct. No. 14-00268 (Apr. 7, 2016), available at
http://ia.ita.doc.gov/remands/15-130.pdf (last visited Dec. 19, 2018) (“Rebar from
Turkey Remand Mem.”). Commerce developed this methodology in response to
arguments by domestic producers regarding alleged distortions in the margin
9 The “matching principle” is “the basic accounting practice whereby expenses are
matched with benefits derived from them.” Saha Thai, 635 F.3d at 1342 (citation
omitted).
10 Plaintiffs do not challenge Commerce’s application of the cost-side adjustment.
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calculations that may arise when the respondent uses fungible inputs both from foreign
sources, which incur import duties, and domestic sources, which do not. See RTAC II,
2016 WL 5122639, at *3-4. Commerce claimed that adhering to its prior methodology
generated “distortions” in the margin calculations because the larger denominator on
the cost-side resulted in a smaller adjustment to normal value than U.S. price. Id. at *3
(citing Rebar from Turkey Remand Mem. at 16). Thus, according to Commerce,
equalizing the denominators used in each adjustment “ensure[d] that the amount added
to both sides of the comparison of EP or CEP with NV is equitable, i.e., duty neutral[,]
meeting the purpose of the adjustment as expressed in Saha Thai.” Id. at *4 (citing
Rebar from Turkey Remand Mem. at 18).
In subsequent administrative proceedings involving respondents that source
inputs from foreign and domestic suppliers, including Plaintiffs here, 11 Commerce has
applied its modified sales-side adjustment. See I&D Mem. at 12; Final Results of
Redetermination Pursuant to Remand, Consol. Ct. No. 16-00218 (July 7, 2018) at 11-
12, ECF No. 106; Issues and Decision Mem. for the Final Results of Antidumping Duty
Admin. Review: Welded Carbon Steel Standard Pipe and Tube Products from Turkey;
2014-2015, A-489-501 (Dec. 12, 2016) at 5-6, available at https://enforcement.trade.
gov/frn/summary/ turkey/2016-30541-1.pdf (last visited Dec. 19, 2018); Issues and
Decision Mem. for the Final Determination of the Antidumping Duty Investigation of
11 +DEDúDQG,FGDVXVHGLPSRUWHGDQGGRPHVWLFLQSXWVSee Sec. D Questionnaire
Resp. of Habaú -DQ  ³+DEDú†'QR”), Exs. D-12, D-13, CR 69-75, CJA Tab
11; Resp. of Icdas to Sec. D of the Antidumping Duty Questionnaire (Jan. 17, 2017)
(“Icdas § DQR”), Exs. D-2, D-12, CR 92, 94, 96, 98, 100-01, 104-23, CJA Tab 9.
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Certain Corrosion-Resistant Steel Products from India, A-533-863 (May 24, 2016) at 7-
11, available at https://enforcement.trade.gov/frn/summary/india /2016-12986-1.pdf (last
visited Dec. 19, 2018). In doing so here, Commerce reiterated the need for an
“equitable, i.e., duty neutral” comparison of export price with normal value to maintain
consistency with “the purpose of the adjustment as affirmed in Saha Thai.” I&D Mem. at
12 (citing Saha Thai, 635 F.3d at 1344). 12
B. Parties’ Contentions
Plaintiffs contend that Commerce’s modified sales-side adjustment is unlawful
because it ignores the statutory linkage between foregone duties and exported subject
merchandise and reduces the full upward adjustment to which they are entitled.
+DEDú’s Mem. at 9-15; Icdas’s Mem. at 9-17; see also Icdas’s Mem. at 17-18 (asserting
that Commerce’s methodology impermissibly attributes duty drawback to domestic
sales, which do not qualify for drawback under the Turkish duty drawback scheme).
Plaintiffs further contend that Commerce’s reliance on Saha Thai to support the
modified sales-side adjustment as ensuring a “duty neutral” approach is misplaced.
+DEDú’s Mem. at 16; Icdas’s Mem. at 21-22. Icdas further contends that Commerce’s
methodology requires a rulemaking procedure pursuant to the Administrative Procedure
Act (“APA”), 5 U.S.C. § 553. Icdas’s Mem. at 24-25.
12 Commerce asserted that it granted the duty drawback adjustment “consistent with [its]
practice.” I&D Mem. at 12 & n.48 (citing Rebar from Turkey Mem. at Comment 1). As
noted, however, Commerce applied its original sales-side adjustment in that
determination. See RTAC I, 2015 WL 7573326, at *4.
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The Government contends that Commerce’s calculation of the duty drawback
adjustment represents a permissible construction of the statute, which is silent on the
issue of allocation. Def.’s Resp. at 15. According to the Government, “[h]ad Congress
intended to limit Commerce’s discretion in performing the EP/CEP duty drawback
calculation, . . . the statute would state that for each unit of subject merchandise
exported, the EP/CEP shall be increased by the amount of duty rebated or not collected
on that unit.” Id. at 16. While recognizing that Saha Thai “does not address allocation,”
the Government contends that the U.S. Court of Appeals for the Federal Circuit
(“Federal Circuit”) “endorsed the concept of a ‘matching principle,’ which would ensure
[duty] neutrality by requiring equal adjustments to both the NV and EP/CEP sides of the
equation.” Id. at 17 (citing Saha Thai, 635 F.3d at 1338, 1342-43). The Government
further contends that Commerce need not conduct a rule-making procedure pursuant to
the APA when it changes it practice. See Def.’s Resp. at 22-23.
RTAC adopts Defendant’s arguments, see Def.-Int.’s Resp. at 2, and further
contends that Commerce’s methodology properly accounts for distortions that may arise
when a respondent uses a mix of domestic and imported inputs or “otherwise manages
its imports and exports such as to effectively pay no import duties regardless of the
market for which its goods are destined,” Def.-Int.’s Resp. at 6; see also id. at 6-10.
C. Commerce’s Methodology is Remanded
The Government relies on the purported statutory silence regarding the way
Commerce must calculate the duty drawback adjustment to support Commerce’s
allocation of exempted duties over total production. The court’s review of Commerce’s
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interpretation and implementation of a statutory scheme is guided by Chevron, U.S.A.,
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). See Apex
Frozen Foods Private Ltd. v. United States, 862 F.3d 1322, 1329 (Fed. Cir. 2017). First,
the court must determine “whether Congress has directly spoken to the precise question
at issue.” Id. (quoting Chevron, 467 U.S. at 842). If Congress's intent is clear, “that is
the end of the matter,” and the court “must give effect to the unambiguously expressed
intent of Congress.” Id. (quoting Chevron, 467 U.S. at 842–43). Only “if the statute is
silent or ambiguous,” must the court determine whether the agency’s action “is based
on a permissible construction of the statute.” Id. (quoting Chevron, 467 U.S. at 843).
Several members of the court, including the undersigned, have previously held
that Commerce’s allocation of foregone duties over total production is inconsistent with
the clear statutory linkage between those duties and exported merchandise. See Eregli
Demir ve Celik Fabrikalari T.A.S v. United States (“Erdemir II”), 42 CIT ___, Slip Op. 18-
180 at 14-15 (CIT Dec. 27, 2018); 7RVoHOLN3URILOYH6DF(QGVWULVL$ùY8QLWHG
States, 42 CIT ___, ___, 321 F. Supp. 3d 1270, 1275-78 (2018); Uttam Galva Steels
Ltd. v. United States, 42 CIT ___, ___, 311 F. Supp. 3d 1345, 1355 (2018); RTAC II,
2016 WL 5122639 at *4. Commerce offers nothing new meriting a different outcome
here. 13
13 The law is well-settled that trial courts, such as this court, are not bound by the
decisions of other trial court judges. Algoma Steel Corp. v. United States, 865 F.2d
240, 243 (Fed. Cir. 1989). The court in Erdemir II nevertheless consulted the reasoning
contained in the earlier opinions to the extent it was persuasive. See Slip Op. 18-180 at
14 n.14. Commerce’s explanation of its methodology and the Government’s
corresponding arguments in this case largely mirror those presented in the agency
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Section 1677a(c)(1)(B) requires Commerce to increase EP/CEP 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) (emphasis added). Congress, thus,
clearly intended the adjustment to capture the amount of duties Plaintiffs would have
paid on their export sales but for the exportation of that merchandise. Allocating
Plaintiffs’ exempted duties over total production is contrary to the plain language
of section 1677a(c)(1)(B) “because it attributes some of the drawback to domestic sales,
which do not earn drawback, and fails to adjust export price by the amount of the import
duties exempted by reason of exportation.” Erdemir II, Slip Op. 18-180 at 14-15; see
also Tosçelik, 321 F. Supp. 3d at 1278. Thus, instead of calculating the amount of the
adjustment based on duties foregone solely in relation to the exported merchandise
eligible for drawback, as the statute requires, Commerce has calculated a lesser
amount that is based on the distribution of some of the exempted duties to domestic
sales, which is contrary to the statute’s plain language. See Erdemir II, Slip Op. 18-180
at 14-15.
The Government’s appeal to agency discretion pursuant to Chevron prong two
also fails. See id. at 15; Def.’s Resp. at 15. Even if the statute was ambiguous for lack
of an explicit methodology, Commerce must “exercise [] its gap-filling authority” in a
“reasonable” manner. See Apex Frozen Foods, 862 F.3d at 1330 (citing Chevron, 467
proceeding and litigation underlying Erdemir II. Thus, the court is not persuaded to
reach a different conclusion.
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U.S. at 843–44). Commerce’s exercise of any discretionary authority it has in this
regard was unreasonable because it substantively departed from the guidance
Congress did provide by decoupling the amount of the adjustment from duties forgiven
solely on exported merchandise. See Ningbo Dafa Chem. Fiber Co., Ltd. v. United
States, 580 F.3d 1247, 1253 (Fed. Cir. 2009) (an agency’s statutory interpretation is
unreasonable when it is “manifestly contrary” to the statutory terms) (citation omitted). 14
Commerce’s—and, by extension, the Government’s—reliance on Saha Thai is
also misplaced. In Saha Thai, the Federal Circuit approved Commerce’s decision to
utilize the cost-side adjustment in conjunction with its original sales-side adjustment to
ensure that normal value and U.S. price are compared on a mutually-duty-inclusive
basis. See 635 F.3d at 1342 (finding that Commerce “reasonably decided” to
accompany an increase to EP with a “corresponding increase to COP and CV” because
“[i]t would be illogical to increase EP to account for import duties that are purportedly
reflected in NV, while simultaneously calculating NV based on a COP and CV that do
14 This court previously observed:
[w]hile Commerce regularly uses the term “distortion” to describe the
margin effect of using only exports as the denominator, Commerce’s
assertion is unaccompanied by any analysis to demonstrate the alleged
distortion. The court might infer that the use of the term implies an
assumption that the cost of the domestically-sourced input approximates
the import duty-exclusive cost of the foreign-sourced input. Commerce
has not, however, provided any support for this assumption. It stands to
reason, moreover, that a domestic supplier of a particular input that incurs
duties when imported from a foreign supplier would price its product at a
level competitive with the duty-inclusive cost of the imported input. In
such a scenario, it is difficult to understand the margin effect of a proper
duty drawback adjustment as distortive.
Erdemir II, Slip Op. 18-180 at 15 n.15.
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not reflect those import duties”); see also id. at 1342-43 (“Under the ‘matching principle,’
EP, COP, and CV should be increased together, or not at all.”). 	The Federal Circuit
never stated or otherwise inferred that the adjustments to EP/CEP and normal value
must be “equal,” Def.’s Resp. at 17, in order to render the comparison between U.S.
price and normal value “duty neutral,” I&D Mem. at 12. An interpretation of the Federal
Circuit’s discussion of duty inclusivity to espouse such a position, which would
neutralize the duty drawback adjustment, goes further than the opinion supports and is
inconsistent with the purpose of the statute. Accordingly, this issue is remanded to the
agency to revise its calculation of the duty drawback adjustment using exports as the
denominator rather than total production. 15
II. 	Quarterly Cost Averaging Methodology
A. Background
Commerce calculates the normal value of the subject merchandise based on
home market sales that are made “in the ordinary course of trade.” 19 U.S.C.
§ 1677b(a)(1)(B)(i). Commerce, therefore, disregards sales at prices that are less than
the cost of production, id. § 1677b(b)(1), because those sales are not made within the
ordinary course of trade, id. § 1677(15)(A). The cost of production “equal[s] of the sum
of . . . 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
15 Because the court finds that Commerce’s modification to its duty drawback
calculation methodology is inconsistent with the statute, the court need not reach
Icdas’s argument that a rule-making procedure was required by the APA.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 16 of 45

Consol. Court No. 17-00204 	Page 17
production of that foreign like product in the ordinary course of business.” Id.
§ 1677b(b)(3)(A) (emphasis added).
The statute does not define the “period” to be used or the method by which
Commerce must calculate the costs of production. SeAH Steel Corp. v. United States,
34 CIT 605, 617, 704 F. Supp. 2d 1353, 1363 (2010). Commerce’s usual methodology
is to rely on “an annual weight-average cost” for the period of investigation. I&D Mem.
at 15. Commerce may depart from its usual methodology and rely on quarterly cost-
averages when “significant cost changes are evident [and] . . . sales can be accurately
linked with the concurrent quarterly costs.” Pastificio Lucio Garofalo, S.p.A. v. United
States, 35 CIT ___, ___, 783 F. Supp. 2d 1230, 1235–36 (2011), aff’d 469 F. App’x 901
(Fed. Cir. 2012); see also I&D Mem. at 15. The significance of any cost changes must
be demonstrated before Commerce analyzes the linkage between costs and sales. I&D
Mem. at 15. A significant cost change “is defined as a greater than 25 percent change
in [cost of manufacturing] between the high and low quarters during the POI . . . .” Id. at
15. 16
In the underlying proceeding, Plaintiffs urged Commerce to conduct its quarterly
cost test using changes in the cost of primary inputs or total direct raw material costs
(“DIRMAT”) instead of the total cost of manufacturing (“TCOM”). See, e.g., +DEDú
16 Commerce conducts this analysis “on a CONNUM-specific basis.” Def.’s Resp. at 26;
see also I&D Mem. at 16. “A ‘CONNUM’ is a control number assigned to materially-
identical products to distinguish them from non-identical, i.e., similar, products.”
Eregli Demir ve Celik Fabrikalari T.A.S v. United States, 42 CIT ___, ___, 308 F. Supp.
3d 1297, 1321 n.34 (2018) (citation omitted).
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 17 of 45

Consol. Court No. 17-00204 	Page 18
§ DQR, Ex. D-3.B at 4-7, CR 69-75, PR 91, CJA Tab 11, PJA Tab 11; Icdas § DQR at
D-9, Ex. D-2. Plaintiffs reasoned that its primary input and DIRMAT costs fluctuated by
more than 25 percent throughout the POI, +DEDú†'QR, Ex. D-3.B at 1; Icdas § DQR
at D-9, Ex. D-2, andLQ+DEDú¶VFDVH its prices closely followed changing costs,
9HULILFDWLRQRIWKH6DOHV5HVSRI+DEDú $SU  ³+DEDú6DOHV9HULILFDWLRQ
Report”) at 5, CR 458, PR 210, CJA Tab 44, PJA Tab 44 H[SODLQLQJWKDW+DEDúVHWVLts
prices daily based on the daily market price for steel scrap). +DEDúfurther argued that
Commerce’s addition of a POI-average transformation cost (consisting of labor and
overhead) to quarterly DIRMAT costs “smooths out any quarterly fluctuations” and
biases the test against using quarterly costs, particularly when price closely follows cost.
See I&D MePDW VXPPDUL]LQJ+DEDú¶VDUJXPHQW 17
Commerce denied Plaintiffs’ request on the basis that neither respondent’s
quarterly cost of manufacturing fluctuated by more than 25 percent during the POI.
Prelim. Mem. at 14; I&D Mem. at 14-16. Noting that its 25 percent threshold is derived
from generally accepted international accounting standards, Commerce explained that
input cost changes “were not significant enough to impact the reported [T]COM,” and its
usual methodology “accounts for both the significant changes in the cost of inputs and
their impact on the cost of manufacturing.” I&D Mem. at 15. Commerce expressed its
preference for conducting the quarterly cost test using changes in total cost of
17 +DEDúGLGQRWKRZHYHUXUJHWKHDJHQF\WRXVHTXDUWHUO\WUDQVIRUPDWLRQFRVWVZKHQ
conducting its quarterly cost test. See HDEDú&DVH%U(Apr. 19, 2017) at 20, CR 161,
PR 212, CJA Tab 45, PJA Tab 45. Rather+DEDúDUJXHGWKDW&RPPHUFHVKRXOG
instead conduct the test solely on the basis of DIRMAT. See id.
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Consol. Court No. 17-00204 	Page 19
manufacturing because the measure “accounts for all production costs” that “impact
pricing.” Id. at 16 (“[U]sing [T]COM is more meaningful as it is the total cost of
manufacturing that prices must be set to recover, not just material costs.”). According to
Commerce, because “material costs as a percentage of [T]COM may vary significantly
from product to product, using [T]COM as the denominator in our significant cost
change test results in a more consistent test.” Id. Thus, Commerce “disagree[d] with
+DEDúWKDWDELDVKHUHFUHDWHVPLVPDWFKHVEHWZHHQVDOHVand costs when price follows
cost closely. To the contrary, by keeping the test linked to [T]COM we prevent
mismatches.” Id.
B. Parties’ Contentions
Plaintiffs contend that Commerce abused its discretion by refusing to conduct its
quarterly cost test using FKDQJHVLQUDZPDWHULDOFRVWV+DEDú¶V0HPDW-24; Reply
%URI3O+DEDú ³+DEDú¶V5HSO\”) at 9-13, ECF No. 45; Icdas’s Mem. at 30-31; Reply
Br. of Pl. Icdas to Def. and Def.-Ints.’ Resp. to Pl.’s Rule 56.2 Mot. for J. on the Agency
R. (“Icdas’s Reply”) at 10-11, ECF No. 46. 18 +DEDú contends that Commerce’s
preference for using total cost of manufacturing on the basis that total production costs
18 Though invoking the court’s substantial evidence review, see +DEDú¶s Mem. at 24;
Icdas’s Mem. at 25; Icdas’s Reply at 9, Plaintiffs do not dispute the evidentiary basis for
Commerce’s finding that changes in their respective quarterly total costs of
manufacturing did not meet Commerce’s 25 percent threshold, see I&D Mem. at 16.
Rather, Plaintiffs assert that Commerce’s TCOM-based test is unreasonable given the
specific facts of this case. See, e.g.+DEDú¶V0HPDW &RPPHUFH¶VSUHIHUHQFHIRU
using total cost of manufacturing is “counterfactual on this record” where input costs
drive changes in price); Icdas’s Mem. at 31 (changing the test would produce a “more
accurate[] and fair” result when “key inputs fluctuated widely”). Plaintiffs, thus,
challenge Commerce’s methodology, which is a legal question.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 19 of 45

Consol. Court No. 17-00204 	Page 20
LPSDFWSULFLQJLJQRUHVUHFRUGHYLGHQFHWKDW³+DEDúVHWVLWVSULFHVdaily based on the
daily change in scrap price´+DEDú¶V0HPDW+DEDúreiterates that Commerce’s
addition of POI-average transformation costs (labor and overhead) to quarterly DIRMAT
costs “intrinsically dilutes any [T]COM fluctuations,” particularly for products with a low
DIRMAT to TCOM ratio. Id. at 20 (asserting that the resulting bias leads to “disparate
treatment” of respondents that are similarly situated with respect to significant input cost
changes); see also id. at 21 (noting that Commerce’s test is more likely to deny the use
of quarterly costs to respondents with products reflecting a low DIRMAT to TCOM ratio).
Icdas contends that Commerce’s 25 percent threshold is “too rigid.” Icdas’s Mem. at 28.
In sum, according to Plaintiffs, Commerce’s methodology results in the exclusion of
more sales from the calculation of normal value as below the cost of production and a
distorted dumping margin. See +DEDú¶V0HPDW23-24; +DEDú¶V5HSO\DW-12;
Icdas’s Mem. at 28.
The Government contends that the court should defer to Commerce’s
methodology because it accounts for significant input cost changes, which may be
moderated by “countervailing trends in other types of costs,” ensures consistent and
predictable policy, and adheres to international accounting standards. Def.’s Resp. at
27-28. RTAC contends that Commerce’s test does not result in disparate treatment of
similarly situated respondents but instead reflects “each producer’s actual overall cost
experience.” Def.-Int.’s Resp. at 11. RTAC further contends that Plaintiffs’ DIRMAT-
based test could result in Commerce’s use of quarterly costs even when “an input
represented a small fraction of overall manufacturing costs.” Id. at 12.
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Consol. Court No. 17-00204 	Page 21
C. Commerce’s Determination is Sustained
The absence of a statutory definition of the period or methodology to be used
when calculating the cost of production for the sales below cost test provides
Commerce with broad discretion in this regard. See SeAH Steel Corp., 34 CIT at 617,
704 F. Supp. 2d at 1363. In assessing the agency’s methodology, the court “ask[s]
whether Commerce's exercise of its gap-filling authority and its explanation are
reasonable.” Apex Frozen Foods, 862 F.3d at 1330 (citing Chevron, 467 U.S. at 843–
44).
From the outset, Plaintiffs do not deny that their cost data fail to meet the
agency’s test based on the total cost of manufacturing. Instead, they suggest that
Commerce abused its discretion by using that test when a different test would have
supported a different result. In order to challenge Commerce’s methodology for
conducting its cost test, Plaintiffs must show that the agency’s methodology was
unreasonable. See Whirlpool Corp. v. United States, Slip Op. 13–155, 2013 WL
6980820, at *11 (CIT Dec. 26, 2013) (citation omitted). Plaintiffs’ challenge fails in that
regard. The fact that Plaintiffs’ alternative methodology would have achieved a different
result is insufficient to suggest that Commerce’s methodology, consistently applied for
at least a decade and rooted in International Financial Reporting Standards, is
unreasonable. See I&D Mem. at 15 and nn.57-58. As Commerce explained, its test
examines, in the first instance, the total cost of manufacture because “it accounts for all
production costs, the total of which impact pricing.” Id. at 16. The fact that Plaintiffs, in
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 21 of 45

Consol. Court No. 17-00204 	Page 22
this case, may alter their pricing based on price changes for direct materials does not
change the reasonableness of Commerce’s total cost of manufacturing approach.
+DEDú¶VDUJXPHQWWKDW&RPPHUFH¶V“methodology results in disparate treatment
of respondents that are in the same position” with respect to changing input costs based
solely on differing DIRMAT to TCOM ratios is misplaced. See +DEDú’s Mem. at 20;
+DEDú’s Reply at 12. The existence of different DIRMAT to TCOM ratios means, quite
simply, that respondents are not similarly situated. The higher the DIRMAT to TCOM
ratio the greater the likelihood that changes in DIRMAT will be reflected by changes in
TCOM. As Commerce explained, Plaintiffs’ changing raw material costs “were just not
significant enough to impact the reported [T]COM.” I&D Mem. at 15. This is not
arbitrary, but instead reflects “each producer’s actual overall cost experience.” Def.-
Int.’s Resp. at 11.
Icdas’s argument that Commerce’s 25 percent threshold is “too rigid” also fails.
See Icdas’s Mem. at 28. Commerce pointed to generally accepted International
Financial Reporting Standards to support its use of the 25 percent threshold and
explained that it “is high enough to ensure that [it] do[es] not move away from [the
agency’s] normal practice without good cause and forgo the benefits of using an annual
average cost, but allows for a change in methodology when significantly changing input
costs are clearly affecting [its] annual average cost calculations.” I&D Mem. at 15
(citation omitted). Determining the most appropriate threshold for departing from the
agency’s usual methodology is the “type of line-drawing exercise” properly left to the
agency’s discretion. Baoding Yude Chemical Industry Co., Ltd. v. United States, 25 CIT
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 22 of 45

Consol. Court No. 17-00204 	Page 23
1118, 1126, 170 F. Supp. 2d 1335, 1343 (2001). Without more, the court sees no
reason to disturb the agency’s exercise of that discretion. Accordingly, Commerce’s
determination on this issue is sustained.
III. 	+DEDú¶V86'DWHRI6DOH
A. Background
The antidumping duty statute does not provide a methodology for determining
the “time of sale” for purposes of Commerce’s comparison between export price and
normal value when determining whether goods are being sold at less than fair value.
See 19 U.S.C. § 1677b(a)(1)(A) (noting that normal value is to be determined “at a time
reasonably corresponding to the time of the sale used to determine the export price or
constructed export price”). However, the Statement of Administrative Action (“SAA”)
accompanying the Uruguay Round Agreements Act defines “date of sale” for the
purposes of currency conversion as the “date when the material terms of sale are
established.” Uruguay Round Agreements Act, Statement of Administrative Action,
H.R. Doc. No. 103-316, vol. 1, at 810 (1994), reprinted in 1994 U.S.C.C.A.N. 4040,
4153. 19
Consistent with the SAA, Commerce’s regulations prescribe that “[i]n identifying
the date of sale of the subject merchandise . . ., the [agency] normally will use the date
of invoice” unless it “is satisfied that a different date better reflects the date on which the
19 The SAA “shall be regarded as an authoritative expression by the United States
concerning the interpretation and application of the Uruguay Round Agreements and
this Act in any judicial proceeding in which a question arises concerning such
interpretation or application.” 19 U.S.C. § 3512(d).
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 23 of 45

Consol. Court No. 17-00204 	Page 24
exporter or producer establishes the material terms of sale.” 19 C.F.R. § 351.401(i);
see also Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,349 (Dep’t
Commerce May 19, 1997) (final rule) (“Preamble”) (“If [Commerce] is presented with
satisfactory evidence that the material terms of sale are finally established on a date
other than the date of invoice, [Commerce] will use that alternative date as the date of
sale”). In other words, Commerce’s date of sale regulation establishes a “rebuttable
presumption” in favor of the invoice date unless the proponent of a different date
produces satisfactory evidence that the material terms of sale were established on that
alternate date. Colakoglu Metalurji A.S. v. United States, 29 CIT 1238, 1240, 394 F.
Supp. 2d 1379, 1380 (2005). 20
In its initial questionnaire responses, +DEDúUHSRUWHGWKe invoice date as the date
of sale. See 6HF$4XHVWLRQQDLUH5HVSRI+DEDú 'HF  ³HabDú†$QR”) at
15-16, CR 25-25, PR 66-68, CJA Tab 5, PJA Tab 5; Sec. C Questionnaire Resp. of
+DEDú -DQ  ³+DEDú†&QR”) at 15, CR 69-75, PR 91, CJA Tab 11, PJA Tab
11+DEDúfurther informed Commerce that, “[f]or U.S. sales, the parties may amend
orders and letters of credit to change price, quantity, product mix, or delivery shipment
date,” and “there may be multiple such amendments for a given order.” +DEDú†$QR
at 18. &RPPHUFHLVVXHGDVXSSOHPHQWDOTXHVWLRQQDLUHUHTXHVWLQJ+DEDúto report all
20 Material terms of sale include price, quantity, and delivery and payment terms. See,
e.g., Sahaviriya Steel Industries Public Co. Ltd. v. United States, 34 CIT 709, 727, 714
F. Supp. 2d 1263, 1280 (2010), aff’d, 649 F.3d 1371 (Fed. Cir. 2011) (citations omitted).
Commerce also has viewed the specification of an aggregate quantity tolerance level as
a material term. See id.
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Consol. Court No. 17-00204 	Page 25
U.S. sales that were invoiced or negotiated to agreement during the period of
investigation, observing that +DEDú¶V86VDOHVSURFHVV³LQGLFDWH>G@WKDWWhe essential
terms of sale are reached upon conclusion of the purchase order and/or contract
negotiations.” Suppl. Sec. A Questionnaire Resp. of +DEDú -DQ  ³+DEDú
Suppl. § AQR”) at 2, CR 144-46, PR 103, CJA Tab 14, PJA Tab 14. In response to
Commerce’s request for examples of sales for which material contract terms changed
between the contract date and invoice date, +DEDústated that it was unable to locate
any sales “where the shipment was not within the terms and tolerances of the contract.”
Id.
Commerce preliminary determined to use the invoice date as the U.S. date of
sale. See I&D Mem. at 19. At verification, Commerce afforded +DEDú latitude to
“[d]emonstrate that the date of invoice/date of shipment is the appropriate [U.S.] date of
sale.” Verification Outline (Feb. 24, 2017) at 7, CR 339, PR 155, CJA Tab 26, PJA Tab
26. &RPPHUFHH[DPLQHGIRXU86VDOHVGXULQJ+DEDú¶VVDOHVYHULILFDWLRQ+DEDú
Case Br. at 22.
+DEDúVXEVHTXHQWO\urged Commerce to select the contract date for its U.S. date
of sale. Id. at 20-24. +DEDúSRLQWHGWRevidence demonstrating that all four verified
sales shipped in accordance with contractual quantity tolerances, prices, and delivery
dates. See id. at 22-23.
For the Final Determination, Commerce continued to use the invoice date as the
U.S. date of sale. I&D Mem. at 18. In so doing, Commerce relied on +DEDú¶VLQLWLDO
TXHVWLRQQDLUHUHVSRQVHV+DEDú¶VIDLOXUHWRFODULI\WKRVHUHVSRQVHVDQGWKHSRVVLELOLW\
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Consol. Court No. 17-00204 	Page 26
of amendments to material terms. Id. at 18-19. Commerce further found that although
changes to the material terms of the verified sales were within contractual tolerances,
those sales represented “only [a] few out of the numerous U.S. sales,” and, thus, “an
insufficient basis on which to . . . change the date of sale determination.” Id. at 19.
B. Parties’ Contentions
+DEDúFRQWHQGVWKDW&RPPHUFH¶Vselection of the invoice date lacks substantial
evidence because the record does not contain evidence of changes to the material
terms of +DEDú¶V86sales between the contract date and the invoice date+DEDú’s
Mem. at 30-32. The Government contends that Commerce properly relied on the
invoice date because the possibility of contract amendments establishes that material
terms of sale were not final until invoicing. Def.’s Resp. at 29, 32. RTAC contends that
+DEDúIDLOHGWR timely notify Commerce of its request to use the contract date or build
the factual record supporting that request. Def.-Int.’s Resp. at 13-14.
C. Commerce’s Determination is Sustained
Commerce’s determination must be assessed in view of the allocation of the
EXUGHQRQ+DEDúWRRYHUFRPHWKHSUHVXPSWLYHXVHRILQYRLFHGDWH7KDWLVWKHSUHFLVH
question before the court is whether substantial evidence supports Commerce’s
determinDWLRQWKDW+DEDúIDLOHGWRSUHVHQW³satisfactory evidence that the material terms
of sale are finally established on [the contract] date.” Preamble, 62 Fed. Reg. at
27,349. A decision regarding the sufficiency of the evidence presented to the agency
“lies primarily within Commerce’s discretion.” Koyo Seiko Co. v. United States, 551
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 26 of 45

Consol. Court No. 17-00204 	Page 27
F.3d 1286, 1292 (Fed. Cir. 2008). Upon review of the record as a whole, Commerce’s
decision is supported by substantial evidence.
By waiting until the factual record had closed and verification completed to argue
IRUWKHXVHRIFRQWUDFWGDWH+DEDúFRQVWUDLQHG&RPPHUFH¶VDELOLW\WRIXOO\test +DEDú¶V
claim that material terms were set on that date. $OWKRXJKWKHUHFRUGFRQWDLQHG+DEDú¶V
assertion that it was unable to identify sales for which material terms had changed
before invoicing+DEDú6XSSO†$45DW+DEDúGLGQRWSURYLGH&RPPHUFHZLWK
supporting documentation or clarify its prior statement regarding the potential for
changes to material terms of sale, see id.; +DEDú†$QR at 17-18+DEDúalso did not
indicate any changes in its position regarding the date of sale in its supplemental
questionnaire response or at verification, which would have alerted Commerce to the
potential need for supporting documentation. See +DEDú6XSSO†$QR at 2;
Verification Outline at 1-2 (noting that Commerce “reserve[s] the right to request any
additional information or materials necessary for a complete verification,” and
Commerce may accept new information at verification when “the need for that
information was not evident previously”). In view of the foregoing, Commerce
reasonably declined to find that the evidence gathered at verification provided
satisfactory evidence supporting +DEDú¶VODVW-minute request for the use of contract
date as the date of sale for all U.S. sales. See I&D Mem. at 19.
+DEDú¶VGLODWRU\DUJXPHQWIRUthe use of contract date distinguishes this case
IURPWKRVHXSRQZKLFK+DEDúVHHNVWRUHO\+DEDú¶V0HPDW FLWLQJHabas Sinai ve
Tibbi Gazlar Istihsal Endustrisi A.S. v. United States, 33 CIT 695, 737-38, 625 F. Supp.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 27 of 45

Consol. Court No. 17-00204 	Page 28
2d 1339, 1374-75, (2009); Nakornthai Strip Mill Public Co. Ltd. v. United States, 33 CIT
326, 336-38, 614 F. Supp. 2d 1323, 1333-34 (2009)). $OWKRXJK+DEDúFLWHVWRWKH
court’s post-remand opinions, a careful review of the preceding opinions reveals that
each plaintiff advocated for the use of contract date early in the proceeding. See Habas
Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. v. United States, 31 CIT 1793, 1795
(2007); Nakornthai Strip Mill Public Co. Ltd. v. United States, 32 CIT 553, 556, 558 F.
Supp. 2d 1319, 1322 (2008). The +DEDú6LQDL court therefore found that Commerce
was within its discretion to rely on a single sample sale to select the contract date when,
unlike here, it had the opportunity to seek additional documentation if necessary. See
33 CIT at 738, 625 F. Supp. 2d at 1375 (noting that “Commerce found no indicia [in the
sample sale] which prompted the agency to require . . . further documentation”). The
Nakornthai court looked for evidence of significant changes to material contract terms
when assessing whether Commerce properly denied the plaintiff’s prompt request for
contract date, because, when faced with such a request, Commerce typically disregards
insignificant changes. See 33 CIT at 336, 614 F. Supp. 2d at 1333. Here, however,
Commerce’s determination GLGQRWWXUQVROHO\XSRQWKHGHJUHHWRZKLFK+DEDú¶VVDOHV
reflected any FKDQJHVWRPDWHULDOWHUPVEXWRQ+DEDú¶VUHTXHVWIRUWKHXVHRILQYRLFH
date throughout the fact gathering stage of the proceeding and concomitant
representations regarding the potential for multiple contract amendments. I&D Mem. at
18-19.
In sum, +DEDúKDGWKHEXUGHQRI³UHPRY>LQJ@ any doubt about when material
terms are firmly and finally set.” Toscelik Profil ve Sac Endustrisi A.S. v. United States,
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 28 of 45

Consol. Court No. 17-00204 	Page 29
41 CIT ___, ___, 256 F. Supp. 3d 1260, 1263 (2017). Commerce’s determination that
+DEDú’s supplemental questionnaire response and the evidence gathered at verified
failed to fulfill that burden is supported by substantial evidence. Accordingly,
Commerce’s date of sale determination is sustained.
IV. 	+DEDú¶V=HUR-Interest Short Term Loans
A. Background
Commerce may adjust normal value to account for “the amount of any difference
(or lack thereof) between the export price or constructed export price and [normal
value]” that Commerce determines is “wholly or partly due to . . . differences in the
circumstances of sale.” 19 U.S.C. § 1677b(a)(6)(C)(iii). One such adjustment pertains
to credit expenses. Hornos Electricos de Venezuela v. United States, 27 CIT 1522,
1538, 285 F. Supp. 2d 1353, 1368 (2003); see generally Import Admin. Policy Bulletin
98.2: Imputed Credit Expenses and Interest Rates (Feb. 23, 1998) (“Policy Bulletin
98.2”) at 3, available at https://enforcement.trade.gov/policy/bull98-2.htm (last visited
Dec. 18, 2018). “[T]o account for differences in credit terms,” Commerce “imputes a
U.S. credit expense and a foreign credit expense on each sale.” Policy Bulletin 98.2 at
1. Commerce “measures the credit expense on a sale by the amount of interest that the
sale revenue would have earned between date of shipment and date of payment.” Id.
Credit expenses “must be imputed on the basis of usual and reasonable commercial
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Consol. Court No. 17-00204 	Page 30
behavior.” Id. (quoting LMI-La Metalli Industriale, S.p.A. v. United States, 912 F.2d 455,
460-61 (Fed. Cir. 1990)). 21
For home market sales transactions, +DEDúUHSRUWHGWKDW³>LW@GLGQRWLQFXUDQ
imputed credit expense during the POI as its only short-term [Turkish Lira] loans in the
period were at zero-interest.” 6HF%4XHVWLRQQDLUH5HVSRI+DEDú -Dn. 17, 2017)
³+DEDú†%QR”) at 31, CR 69, PR 91, Suppl. CJA Tab 3, Suppl. PJA Tab 3.
Elsewhere, +DEDúQRWHGWKDWLWVUHSRUWLQJRIzero-interest short-term loans was
consistent with Commerce’s prior use of such loans to impute credit expenses. Suppl.
Secs. A-'4XHVWLRQQDLUH5HVSRI+DEDú )HE at 6 & n.1, CR 249-53, PR
145, CJA Tab 23, PJA Tab 23 (citations omitted).
The domestic producers FKDOOHQJHG+DEDú¶VVKRUW-term interest rate, pointing to
Commerce’s practice of allowing negative credit expenses when “the date of payment
occurs before the date of shipment” because “the seller receives the benefit of the time
value of money, resulting in revenue or income.” Pre-Prelim. Comments Regarding
+DEDú )HE  ³Pet’r’s Comments”) at 16 & n.52, CR 337, PR 153, CJA Tab
25, PJA Tab 25 (citing Bottle-Grade Polyethylene Terephthalate (PET) Resin From
Indonesia, 70 Fed. Reg. 13,456 (Dep't Commerce Mar. 21, 2005) (notice of final
21 By its terms, Policy Bulletin 98.2 provides guidance when a respondent “has no short-
term borrowings in the currency of its foreign market transactions.” Policy Bulletin 98.2
at 4 (emphasis added). However, Commerce elected to consider the criteria
enumerated therein for purposes of determining the interest rate with which to calculate
+DEDú¶VFUHGLWH[SHQVHVSee I&D Mem. at 22-23 & n.83 (citing Policy Bulletin 98.2).
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Consol. Court No. 17-00204 	Page 31
determination of sales at less than fair value)). 22 Arguing that +DEDú¶VVKRUW-term
interest rate “does not reflect commercial reality in Turkey,” the domestic producers
sought to persuade Commerce to instead use “[p]ublicly available information from the
Central Bank of the Republic of Turkey [(“CBRT”)],” which showed that short-term
lending rates in Turkey during the period of investigation ranged from 9.0 percent to
10.75 percent, with an average rate of 10.42 percent (the “CBRT rate”). Id. at 16-17 &
n.54 (citing id., Ex. 2). 23
Agreeing with the domestic producers, Commerce preliminarily recalculated
+DEDú’s home market credit expenses using the CBRT rate on the basis that the rate
conforms with commercial reality. 3UHOLP'HWHUPLQDWLRQ0DUJLQ&DOFXODWLRQIRU+DEDú
(Feb. 28, 2017) at 1-2, CR 342, PR 165, CJA Tab 33, PJA Tab 33. Commerce applied
22 In the accompanying decision memorandum, Commerce explained that when “the
customer pays before the time of shipment, the seller receives the benefit of the time
value of money”; thus, “setting negative credit expenses to zero would not accurately
reflect normal business practice and would in fact, distort the final margin calculations.”
Issues and Decision Mem. for the Final Determination in the Antidumping Duty
Investigation of Bottle Grade Polyethylene Terephthalate (PET) Resin from Indonesia,
A-560-817 (March 14, 2005) at 13, available at https://enforcement.trade.gov/frn/
summary/indonesia/E5-1222-1.pdf (last accessed Dec. 14, 2018). Commerce pointed
to additional proceedings in which negative credit expenses were included in its margin
calculations. Id. (citations omitted).
23 Exhibit 2 consists of data “obtained through Haver Analytics, at http://www.haver.
com.” Pet’r’s Comments at 17 n.54; see also id., Ex. 2. According to the domestic
producers, “Haver Analytics is the premier provider of time series data for the global
strategy and research community” and “maintains 200+ databases from over 1350
government and private sources.” Id. at 17 n.54.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 31 of 45

Consol. Court No. 17-00204 	Page 32
WKHLQWHUHVWUDWHWR+DEDú¶VUHSRUWHG³FXVWRPHU-specific average age of receivables.” Id.
at 2 & n.4 FLWLQJ+DEDú†%QR at 19-21). 24
Commerce affirmed its imputed credit expense calculation for the Final
Determination. See I&D Mem. at 22-23. Pointing to evidence of prepayment, 25
&RPPHUFHH[SODLQHGWKDW+DEDú benefitted from that prepayment “for longer periods
than what it paid (zero-interest) on its [short-term] borrowings.” Final Determination
Margin &DOFXODWLRQIRU+DEDú 0D\  ³+DEDú)LQDO&DOF0HP”) at 4-5, CR
467, PR 223, CJA Tab 50, PJA Tab 50. 26 Commerce determined that the CBRT rate
DIIRUGHGD³PRUHFRPSDUDEOH´PHDVXUHRIWKHWLPHYDOXHRI+DEDú¶VSUHSDLGVDOHVDQG
was consistent with the non-zero-interest UDWHUHSRUWHGLQ+DEDú¶VILQDQFLDOVWDWHPHQW in
connection with short-term trade receivables 27 and Icdas’s reported rate. 	Id. at 5; I&D
Mem. at 23.
B. Parties’ Contentions
+DEDúFRQWHQGVWKDW&RPPHUFH¶VGHWHUPLQDWLRQLVXQVXSSRUWHGE\ substantial
HYLGHQFHDQGQRWLQDFFRUGDQFHZLWKODZ+DEDú’s Mem. at 37-39. 	+DEDúDVVDLOV
24 +DEDúWUDFNVLWVUHFHLYDEOHVRQDFXVWRPHU-specific, not transaction-specific, basis.
See +DEDú†%45DW+DEDúUHSRrted negative receivables for most customers,
LQGLFDWLQJWKDWWKRVHFXVWRPHUVPDLQWDLQHGSRVLWLYHSD\PHQWEDODQFHVZLWK+DEDúSee
id., Ex. B-6.
25 +DEDúUHFHLYHGSUHSD\PHQW³IRUWKH[[ 	]] of its home market sales,”
ranging from [[ ]] to [[ 	]] GD\VLQDGYDQFH+DEDú)LQDO&DOF0HPDW
26 When sales are prepaid, Commerce uses “the same formula as . . . when payment is
made [after] shipment”; however, “the formula generates addition of a negative credit
expense.” Id. at 3.
27 +DEDú’s financial statement indicated that [[ 	]] on trade
receivables. +DEDú†$45([$-11 at 32.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 32 of 45

Consol. Court No. 17-00204 	Page 33
Commerce’s reliance on the CBRT data supplied by Haver Analytics because it is not “a
primary source” and does not represent commercial rates. Id. at 37-38. HabDúIXUWKHU
asserts that neither Icdas’s reported rates nor its earned interest rate on trade
receivables are relevant to assessing the commerciality of its short-term interest rate.
Id. at 39; +DEDú’s Reply at 18. +DEDúDOVRFRQWHQGVWKDWCommerce has previously
included zero-interest loans in its credit expense calculations. See +DEDú¶V0HPat 38
(citations omitted)+DEDú¶V5HSO\DW19-20 (citing Issues and Decision Mem. for the
Final Aff. Determination in the Less-Than-Fair-Value Investigation of Welded Line Pipe
from the Republic of Turkey, A-489-822 (Oct. 5, 2015) (“Line Pipe from Turkey Mem.”)
at Comment 13, 80 ITADOC 61632; Issues and Decision Mem. for the Final Results of
the Antidumping Duty Admin. Review: Certain Welded Carbon Steel Pipe and Tube
from Turkey, A-489-501 (Dec. 2, 2011) (“Steel Pipe from Turkey Mem.”) at Comment
10, 76 ITADOC 76939).
The Government contends that substantial evidence supports Commerce’s
GHWHUPLQDWLRQDQG+DEDúSRLQWVWRQRHYLGHQFHrebutting the accuracy of the CBRT
rate. Def.’s Resp. at 35-36. RTAC contends that similarities between the CBRT rate,
Icdas’s rate, and the interest rate reported in +DEDú’s financial statement “support[] the
overall reasonableness of [Commerce’s] decision” WRUHMHFW+DEDú¶VUHSRUWHGUDWH'HI-
Int.’s Resp. at 16. RTAC further contends that Commerce “reasonably declined to treat
[] advance prepayment as worthless.” Id.
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Consol. Court No. 17-00204 	Page 34
C. Commerce’s Determination is Sustained
From the outset, +DEDúPLVVWDWHV&RPPHUFH¶VEDVLVIRUUHMHFWLQJLWV]HUR-
interest short-WHUPUDWHV+DEDúDVVHUWVWKDW&RPPHUFHUHMHFWHGLWVUDWHVDV³QRQ-
commercial” and, thus, seeks to persuade the court that its loans are indeed
commercial. See +DEDú¶V0HPDW-39; +DEDú¶V5HSO\DW&RPPHUFHKRZHYHU
QHYHUVWDWHGWKDW+DEDú¶VORDQVZHUHQRQ-commercial; rather, Commerce found that
+DEDú¶VVKRUW-term interest rate associated with those loans was not “reasonable or
representative of usual commercial behavior” when considering the appropriate rate
with which to impute revenue derived from prepayment. 	I&D Mem. at 23; see also
HDEDú)LQDO&DOF0HPDW7KHLVVXHFRQIURQWLQJ&RPPHUFHFRQFHUQHGWKHSURSHU
interest rate with which to calculate the benefit inuring to +DEDúIURPWKHDGYDQFH
payment, not the loss occasioned by delayed payment. See +DEDú)LQDO&DOF0HPDW
4-5. Because longer lending periods are associated with higher interest rates, see id. at
4, Commerce determined that applying a zero-interest rate WR+DEDú¶VQHJDWLYH
receivables would not capture the benefit derived therefrom, id. at 5, and, thus, the rate
was not “reasonable or representative of usual commercial behavior,” I&D Mem. at 23.
+DEDúIDLOVWRSHUVXDGHWKHFRXUWWKDW&RPPHUFHVKRXOGHIfectively treat
prepayment as worthless. +DEDú¶VUHOLDQFHRQ&RPPHUFH¶VSULRULQFOXVLRQRIzero-
interest loans in its credit expense calculations is misplaced because the cited
determinations do not involve instances of prepayment. See Line Pipe from Turkey
Mem. at 30-31; Steel Pipe from Turkey Mem. at 28-29. ,QGHHG+DEDúZKROO\fails to
address that crucial distinction even though it underpinned Commerce’s decision here.
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 34 of 45

Consol. Court No. 17-00204 	Page 35
See +DEDú¶V)LQDO&DOF0HPDW-5. Instead, +DEDúFKDOOHQJHV&RPPHUFH¶V
evidentiary foundation. Those challenges lack merit.
+DEDúDUJXHVWKDWWKHsource of the CBRT rate is not demonstrably reliable and
is not a commercial rate. See, e.g.+DEDú¶V0HPDW-+DEDúSRLQWVWRQR
evidence, however, specifically undermining the source’s reliability. While the CBRT
rate may not represent a commercial rate, it is consistent with other rates on the record.
See I&D Mem. at 23 	Q FLWLQJ+DEDú†$45([$-11 at 32)+DEDú)LQDO&DOF
Mem. at 5. Moreover, +DEDúIDLOHG to offer Commerce any alternative rates other than
its zero-interest short-term rate. See QVD Food Co. v. United States, 658 F.3d 1318,
1324 (Fed. Cir. 2011) (the burden of creating an adequate record before Commerce lies
with interested parties).
+DEDúalso argues that Icdas’s “non-zero interest rates [do] not controvert the
FRPPHUFLDOQDWXUHRI+DEDú¶VRYHUQLJKWORDQV´+DEDú¶V5HSO\DWsee also +DEDú¶V
Mem. at 39. $VGLVFXVVHGDERYH+DEDú¶VDUJXPHQWLVPLVGLUHFWHGCommerce did not
base its decLVLRQRQWKHFRPPHUFLDOLW\RI+DEDú¶VORDQV RUODFNWKHUHRI rather,
Commerce FRPSDUHG+DEDú¶VUDWHWRRWKHUUDWHVRQWKHUHFRUGDQGfound that +DEDú¶V
rate was not commercially reasonable given its negative receivables. 	I&D Mem. at 23;
cf. +DEDú)LQDO&DOF0HPDW
+DEDúfurther argues that the interest rate in its financial statement “is simply a
ILJXUHSOXJJHGE\+DEDú¶VDXGLWRUV´DQG³KDVQREHDULQJRQWKHDFWXDOUDWHVDWZKLFK
+DEDúERUURZHGPRQH\LQWKH32,´+DEDú¶V5HSO\DW8. +DEDú points to no evidence
indicating that the interest rate in its financial statement does not, in fact, represent the
Case 1:17-cv-00204-MAB Document 67 Filed 01/30/19 Page 35 of 45

Consol. Court No. 17-00204 	Page 36
interest earned on short-term trade receivables or provide a convincing reason as to
why Commerce erred in considering this rate as supportive of its selection of the CBRT
UDWHWRGHWHUPLQH+DEDú¶V home market credit expense.
In sum, Commerce reasonably determined that the consistency between the
&%57UDWH,FGDV¶VUDWHVDQG+DEDú¶VHDUQHGLQWHUHVWUDWHPHULWHGUHMHFWLQJ+DEDú¶V
zero-interest short-term borrowing rate as a means of imputing its credit expenses. See
, 	'0HPDW$FFRUGLQJO\&RPPHUFH¶VXVHRIWKH&%57UDWHWRFDOFXODWH+DEDú¶V
imputed credit expenses is sustained.
V. 	Use of Partial Adverse Facts Available
A. Background
When an interested party “withholds information” requested by Commerce,
“significantly impedes a proceeding,” “fails to provide [] information by the deadlines for
submission of the information,” or provides information that cannot be verified pursuant
to 19 U.S.C. § 1677m(i), Commerce shall use the “facts otherwise available” in making
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Consol. Court No. 17-00204 	Page 37
its determination. 19 U.S.C. § 1677e(a)(2). Commerce’s authority to use the facts
otherwise available is subject to 19 U.S.C. § 1677m(c), 28 (d), 29 and (e). 30
Additionally, if Commerce determines that the party “has failed to cooperate by
not acting to the best of its ability to comply with a request for information,” it “may use
an inference that is adverse to the interests of that party in selecting from among the
28 Subsection (c) provides, inter alia, that when an interested party informs Commerce
promptly after receiving a request for information “that such party is unable to submit the
information requested in the requested form and manner, together with a full
explanation and suggested alternative forms,” then Commerce “shall consider the ability
of the interested party to submit the information in the requested form and manner and
may modify such requirements to the extent necessary to avoid imposing an
unreasonable burden on that party.” 19 U.S.C. § 1677m(c)(1).
29 Subsection (d) provides the procedures Commerce must follow when a party files a
deficient submission. Pursuant thereto, if Commerce finds that “a response to a request
for information” is deficient, “[it] shall promptly inform the person submitting the
response of the nature of the deficiency and shall, to the extent practicable, provide that
person with an opportunity to remedy or explain the deficiency in light of the time limits
established for the completion of investigations or reviews.” Id., § 1677m(d). If any
subsequent response is also deficient or untimely, Commerce, subject to subsection (e),
may “disregard all or part of the original and subsequent responses.” Id.
30 Pursuant to subsection (e), Commerce
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 ... 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.
Id., § 1677m(e).
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Consol. Court No. 17-00204 	Page 38
facts otherwise available.” Id., § 1677e(b)(1)(A). 31 “Compliance with the ‘best of its
ability’ standard is determined by assessing whether a respondent has put forth its
maximum effort to provide Commerce with full and complete answers to all inquiries in
an investigation.” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir.
2003). 32 Before applying an adverse inference, Commerce must demonstrate “that the
respondent[’s] . . . failure to fully respond is the result of the respondent's lack of
cooperation in either: (a) failing to keep and maintain all required records, or (b) failing
to put forth its maximum efforts to investigate and obtain the requested information from
its records.” Id. at 1382-83. “An adverse inference may not be drawn merely from a
failure to respond.” Id. at 1383. Rather, Commerce may apply an adverse inference
when “it is reasonable for Commerce to expect that more forthcoming responses should
have been made.” Id.
In its section A questionnaire response, Icdas informed Commerce that it sold
subject merchandise in the home market directly and through several affiliated resellers.
Sec. A Questionnaire Resp. of Icdas (Dec. 19, 2016) (“Icdas § AQR”) at A-12, CR 33,
PR 69, CJA Tab 4, PJA Tab 4. In response to Commerce’s request that Icdas report
the manufacturer of merchandise sold directly and through its affiliates, Icdas stated,
inter alia:
31 Use of the facts available with an adverse inference may be referred to as
“adverse facts available” or “AFA.”
32 Nippon Steel predates the TPEA. However, the relevant statutory language
discussed in that case remains unchanged. Compare 19 U.S.C. § 1677e(b)(2012), with
19 U.S.C. § 1677e(b)(1)(2015).
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Consol. Court No. 17-00204 	Page 39
For sales made by affiliated resellers . . . ICDAS has identified almost all
the transactions whether the foreign like product sold is produced by
ICDAS or other unaffiliated manufacturers. In a few cases Icdas was
unable to verify that Icdas was the producer. For the transactions that are
not identified, ICDAS leaves this field as blank. However, considering the
magnitude of the ICDAS sales to its affiliated resellers, and the fact that
ICDAS rarely purchases from other manufacturers, ICDAS assumes that
these sales are also manufactured by ICDAS.
Sec. B Questionnaire Resp. of Icdas (Jan. 17, 2017) (“Icdas § BQR”) at B-48, CR 124,
PR 109, CJA Tab 10, PJA Tab 10.
Commerce issued a supplemental questionnaire requesting Icdas to remedy the
deficient response by “provid[ing] the manufacture code for the . . . home market
transactions that reported no manufacturer code.” Suppl. Questionnaire for Secs. B, C
and D (Feb. 1, 2017) at 4, CR 182, PR 115, CJA Tab 15, PJA Tab 15. Commerce
further requested Icdas to “explain the likelihood that you did not produce these
products.” Id. at 4. Icdas responded:
Affiliated resellers normally purchase subject merchandise from Icdas. For
the back-to-back sales[33] , all the affiliated resellers are able to identify the
manufacturer of subject merchandise. For the rest of the sales, even if the
subject merchandise is kept in the inventories for an hour, affiliated
resellers [do] not track the manufacturers. Therefore[,] neither Icdas nor
the relevant affiliated resellers have this information.
Suppl. Secs. B-C and 2nd Suppl. Sec. D Questionnaire Resp. of Icdas (Feb. 13, 2017)
(“Icdas Suppl. § B-C-D QR”) at 13, CR 273, PR 146, CJA Tab 22, PJA Tab 22. Icdas
provided Commerce with “percentages for each affiliated resellers’ quantities sold to
33 The Federal Circuit has described “back-to-back” sales as when a foreign producer
sells subject merchandise to an affiliated exporter, who then sells it to a U.S. affiliate,
who then sells it to an unaffiliated U.S. purchaser. See AK Steel Corp. v. United States,
226 F.3d 1361, 1365 (Fed. Cir. 2000).
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Consol. Court No. 17-00204 	Page 40
third parties by manufacturer,” and “a summary of Icdas’[s] sales to its affiliates.” Id.
According to Icdas, that information indicated that its affiliates purchase “a very
insignificant amount of resales . . . from other manufacturers” and, thus, it believed that
the transactions missing manufacturer codes most likely involved merchandise
produced by Icdas. Id. According to Icdas, Commerce could therefore consider Icdas
as the manufacturer for those transactions. 	Id.; see also id., Ex. SB-26 (sales
quantities of affiliated resellers by manufacturer).
For the Final Determination, Commerce concluded that “Icdas provided
incomplete information with respect to the manufacturer of certain sales made by its
home market affiliates,” and, thus, determined to use facts available. I&D Mem. at 4-6.
Commerce further found that an adverse inference was warranted when selecting from
among the available facts. See id. Commerce explained that the identity of the
manufacturer of rebar sold by Icdas’s affiliates “is critical to the [agency’s] dumping
analysis” and “is the type of information that a large steel manufacturer such as Icdas
should be reasonably able to provide.” Id. at 30. To support this finding, Commerce
pointed to Icdas’s mill test certificates that identify the manufacturer of the rebar and the
waybills included in Icdas’s home markets sales that “identify the Icdas mill where the
rebar at issue was manufactured.” See id. at 6 & nn.18-19 (citations omitted); id. at 30.
According to Commerce, “had [Icdas] made the appropriate effort” to obtain the missing
manufacturer codes “using the records over which it maintained control,” it “would have
been able to provide this information.” Id. at 6. Commerce concluded that “Icdas did
not act to the best of its ability” and applied partial adverse facts available to Icdas’s
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Consol. Court No. 17-00204 	Page 41
downstream home market sales missing the manufacturer code. Id.; see also id. at 29-
31. For those sales, Commerce “assigned the highest non-aberrational net price from
Icdas’[s] downstream home market sales.” Id. at 6, 31.
B. Parties’ Contentions
Icdas contends that Commerce’s use of partial adverse facts available lacks
substantial evidence and is contrary to law. Icdas’s Mem. at 31. Icdas asserts that it
reported all the information it had regarding the manufacturer of its affiliates’ resales but
cannot “report information that it does not have.” Id. at 36. Icdas further contends that
use of adverse facts available is inappropriate when cooperative respondents are
“unable to provide the information requested” and “offer[] a reasonable approximation or
alternative.” Icdas’s Reply at 12 (citing, inter alia, Husteel Co. v. United States, 39 CIT
___, ___, 98 F. Supp. 3d 1315, 1361 (2015)) (internal quotation marks omitted); see
also Icdas’s Mem. at 33.
The Government contends that Commerce correctly applied an adverse
inference when selecting from among the facts available because Icdas’s failure to
report all the manufacturer codes reflected “inadequate recordkeeping.” Def.’s Resp. at
37. The Government also contends that Commerce complied with predicate statutory
requirements set forth in 19 U.S.C. §1677m(d) and (e) before applying an adverse
inference. Id. at 40-41. The Government further contends that Icdas’s reliance on
Husteel is misplaced because the identity of the manufacturer “cannot be derived from
other data.” Id. at 41.
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RTAC contends that the requested information could have been obtained
“through a review of mill test reports or other documentation associated with the sales,”
which “would [not] have required a particularly intense effort on Icdas’s part.” Def.-Int.’s
Resp. at 17.
C. Commerce’s Determination is Remanded
Commerce’s use of adverse facts available is circumscribed by statutory
procedural requirements and must be accompanied by specific factual findings. Here,
Commerce’s use of adverse facts available failed to comply with all statutory
requirements and the agency’s conclusion that Icdas failed to act to the best of its ability
lacks substantial evidence.
As noted, section 1677m(c)(1) requires a respondent to promptly inform
Commerce when it cannot comply with a request for information and suggest an
alternative form for supplying that information. 19 U.S.C. § 1677m(c)(1). Icdas
complied with that requirement when it explained that its affiliated resellers do not track
the manufacturer of rebar sold in non-back-to-back sales and suggested, with
supporting documentation, why Commerce could consider Icdas the manufacturer for
those sales. Compare Maverick Tube Corp. v. United States, 857 F.3d 1353, 1360–61
(Fed. Cir. 2017) (respondent “never triggered” section 1677m(c)(1) when it “never
claimed that it was unable to provide [the requested information]”), with World Finer
Foods, Inc. v. United States, 24 CIT 541, 543-44 (2000) (producer triggered section
1677m(c)(1) when it informed Commerce that financial constraints prevented it from
fully responding to questionnaire and offered to supply limited information). The statute,
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Consol. Court No. 17-00204 	Page 43
thus, required Commerce to consider Icdas’s ability “to submit the information in the
requested form and manner” and whether to “modify such requirements to the extent
necessary to avoid imposing an unreasonable burden on that party.” 19 U.S.C.
§ 1677m(c)(1); see also World Finer Foods, 24 CIT at 543-44 (Commerce erred in
resorting to AFA without complying with section 1677m(c)(1)); cf. Husteel, 98 F. Supp.
3d at 1361 (Commerce properly declined to use AFA when the respondent “made an
effort to provide its best estimate of the information Commerce had asked [it] to report”).
Commerce did not comply with this requirement and instead resorted to use of
AFA. Commerce’s finding that Icdas could have undertaken additional efforts to obtain
mill test certificates and waybills purportedly kept by its affiliates to identify the missing
manufacturer codes, see I&D Mem. at 30-31, is contradicted by Icdas’s statement that,
for non-back-to-back sales, its affiliated resellers “[d]o not track the [identity of the]
manufacturers” and, thus, do not “have this information,” Icdas Suppl. § B-C-D QR at
13. Commerce’s determination was, therefore, procedurally lacking, and its finding that
Icdas failed to “act to the best of its ability” by failing to produce information at its
disposal lacks substantial evidence. 34 See I&D Mem. at 6.
34 For this reason, Commerce’s reliance on its prior decision in CTL Plate from France
lacks merit. See I&D Mem. at 30 & n.118 (citing Issues and Decision Mem. for the Final
Aff. Determination in the Less-Than-Fair-Value Investigation of Certain Carbon and
Alloy Steel Cut-To-Length Plate from France, A-427-828 (Apr. 4, 2017), 82 ITADOC
16363 (“CTL Plate from France Mem.”) at 46). There, Commerce found that a
respondent failed to act to the best of its ability to identify the manufacturer of affiliated
downstream sales using information it possessed. CTL Plate from France Mem. at 46 &
n.147 (citation omitted). Here, Commerce’s finding that Icdas’s affiliates possessed
information that Icdas could have obtained with more effort is unsupported.
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Consol. Court No. 17-00204 	Page 44
The Government’s assertion that Commerce’s determination is supported by
evidence of Icdas’s “inadequate recordkeeping” fails because Commerce did not base
its use of AFA on such a finding. Here, Commerce’s use of AFA is predicated on
Icdas’s purported failure to cooperate by not putting forth its maximum efforts to
investigate and obtain the manufacturer codes from its records. I&D Mem. at 6, 30-31.
The court may not sustain the agency's decision on a basis other than the one
“articulated . . . by the agency itself.” Burlington Truck Lines, Inc. v. United States, 371
U.S. 156, 168–69 (1962). For these reasons, Commerce’s use of partial adverse facts
available is remanded for reconsideration.
CONCLUSION AND O RDER
In accordance with the foregoing, it is hereby
ORDERED that Commerce’s Final Determination is remanded for
reconsideration regarding the agency’s calculation of Plaintiffs’ duty drawback
adjustment, as set forth in Discussion Section I; it is further
ORDERED that Commerce’s Final Determination is remanded with respect to the
agency’s use of partial adverse facts available to Icdas, as set forth in Discussion
Section V; it is further
ORDERED that Commerce’s Final Determination is sustained in all other
respects; it is further
ORDERED that Commerce shall file its remand redetermination on or before 90
days from the restoration of appropriations; it is further
ORDERED that subsequent proceedings shall be governed by USCIT Rule
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Consol. Court No. 17-00204 	Page 45
56.2(h); and it is further
ORDERED that any comments or responsive comments must not exceed 6,000
words.
/s/ 	Mark A. Barnett
Mark A. Barnett, Judge
Dated: January 23, 2019
New York, New York
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