united states court of appeals for the federal circuit is now open and in session god save the united states and the honorable court understanding if i understand correctly what happened and the st thing is that the rebates if we can call them that or allocated among the entire production both domestic us import and how is that consistent with the statute when the when the rebates are only given because of exports to the united states the reason it's consistent your honor is because the entire purpose of the do the drawback adjustment is to increase export price by the amount rebates that to account for the fact that those import duty costs are actually reflected in normal value that's what this court found in sa tai so the purpose of the adjustment is to correct that imbalance between a normal value that does contain duties and an export price that does not contain duties but i'm just not understanding how the statute or sa allows that it does of course does it has to be a corresponding entry on the normal value side but that's not the approach th was those which raw materials were used in exports versus market sales i was not tracked by the respondent they tracked the amount paid they tracked the amount i d d rebated or exempted but those inputs were not literally physically tied just to exports and so the only way for commerce to determine what duty burden actually existed in normal value was to use  whether there's any link between what's getting exported out from that home country and whether that that company was getting certain inputs from a foreign source that would otherwise cause it to have to pay import duties is that right that's correct and then the next question is if so then the amount of that foreign source input that the company received is that a large enough amount that it would cover the amount of inputs that were required in order for all those export of good that came here to united states is that right case here is that right congress did find that the two prong test was met but they did not find that all of those all imports were necessarily consumed in the production of exports all that was found was that under the indian system you are as loud to import duty free as long as you export a certain amount for the country of the country of india the indian government gave them gabble full import duty relief for those raw materials that came in from a foreign source that right only to the extent that that mandates at least for the export price we give the full upward adjustment of the amount of import duties because the amount of the adjustment should only reach whatever amount of duty burden actually exists on normal value and that amount is unknown because we do not know i'm sorry did you just say normal value right the amount of the increase to export price and talk by the court said the reason we increase export prices with the advent of duties is to reach a fair comparison because we're presuming that the normal value does contain these important duties but that presumption is not necessarily correct and that's why commerce said we need to actually assume that both the imported imports and the domestic are proportionally consumed in the production for home market and export because we don't know the actual amount of the duties that are reflected in normal value and if we don't know that we don't know what export prices just provided for the statutory drawback adjustment because it understood that foreign draw back programs create differences in tax incidence making it cheaper to produce and priced goods for exports and for domestic consumption point of the adjustment duty inclusive places as normal value it makes sense for congress to consider the degree to which import duty costs are reflected in normal value when calculating the sales side drawback adjustment where respondent uses both imported and domestic united states and calculated you have to show that that that's the case what difference does it make whether the particular units were as used to mess to clean or the government withdraw all of unfortunately your honor you know i'm not the government i can't opine but i can tell you that based on what's going on at the department of commerce i have seen no i haven't seen the department of commerce clear we don't have any issue before us as to the propriety of the nd lien man determination calculation right because that doesn't affect the dumping that's correct your  this was different from the final determination where congress calculated an adjustment only for the cost of production essentially based on total duty exemptions and the general divided by total production  market prices are due to inclusive and there is no basis in the statute for this notion that import duties in bed in normal value must be equal to the amount of the draw back adjustment on expert price and there are that are on the export sales i understand understand what the argument is apparently part of the argument is that the items export of the united states might have been made with domestic imports which didn't bear the burden opponents had argued in their briefs but going back to the earlier discussion what we found by has reported with respect to expert price are duty exemptions where some of the input is coming from within the home country domestically but then maybe say half of that input is coming from the outside and it's getting slapped with an import duty  but of course if that half that's coming in from the outside is equal to the amount of input you need for your export of goods united states then you get full import duty relief and you get a pretty drawback adjustment but the problem we have here is that if the other half of that input that's purely domestically sourced is the input that's being used for  market goods that are sold domestically there's no import duty that's been actually applied to those inputs because they were sourced domestically y assumption for the duty drawback of adjustment is that you are getting and a corresponding import duty applied to those inputs and so therefore commerce ought to do something within the duty drawback adjustment export price then what is it that you think ought to be done in a situation like my hypothetical where we the input that was used for the goods that are sold domestically aren't getting any import duties of slapped on them do you think on the normal value there should just we should increase critical point do you draw back on the export price and the cost of production these are two separate calculations and this is how they have been ever since the court decision  conceptually i think you can see what the distortion is in my hypothetical where in the statute there's an assumption that you're you're just going to give a full duty drawback adjustment and situation hypothetical because you're assuming that all of the domestically sold goods are burdened by an import duty but my fact that i'm saying no that's not true they haven't been burden that way because the input is being sourced domestically so conceptually speaking wouldn't you agree that something has to be done on the normal value side in order to create a fair comparison given what it appears the statute mandates to be done on the export price i had with a duty drawback adjustment can you just say yes or no so i can follow you that for the normal value the normal value is going to incorporate the import duties that domestic sales are going to be burdened by and i've created a fact pattern hypothetical where that's not true then why wouldn't under this hypothetical mine you do the exact same thing on the normal value side in order to create a quote unquote fair comparison as required by the statu calculation is a larger number and that would result in to leaving the do you draw back adjustment that was earned on export sales a drawback adjustment can only be earned if their export and let me give you another hypothetical suppose the us importer has two factories in a foreign country and one factory is produced using domestic inputs and the other factory uses foreign influence which are subject to the drawback adjustment but every single item exported to the united states comes from the factory that don't that way and i just don't understand your answer at all because the the inputs that are subject to the to the rebates are calculated based entirely on the number of units export in the united states but why isn't the statute under those circumstances require the same duty draw back adjustment as everything work in your theory and i thought what the congress did was to say it doesn't make any difference what imports were used for the u s export items as long as the duty drawback upon the same thing is true in my hypothetical why isn't commerce in my hypothetical obligated to make the same adjustment to u s products you seem to think maybe they should understand i don't understand how that same hypothetical situations in the hypothetical identified by judge chen there would be no import duty burden on domestic sales on normal value and so there would merchandise and their methodology was reasonable because they had a proportional consumption of domestic and imported inputs in both the products sold metrically and the products sold for export and this was a fair assumption to make and it resulted in them using the same denominator to count the export sales side adjustment that they used to calculate the cost of production adjustment and that was necessary