Slip Op. 23- 151 UNITED STATES COURT OF INTERNATIONAL TRADE GUJARAT FLUOROCHEMICALS LIMITED, Plaintiff,

v. UNITED STATES, Defendant,
and DAIKIN AMERICA, INC.,
Defendant- Intervenor. Before: Timothy C. Stanceu, Judge

Court No. 22-00120

OPINION [Sustaining an agency decision submitted in response to court order] Dated: October 13, 2023 John M. Gurley , ArentFox Schiff LLP, of Washington, D.C., for plaintiff. With him on the briefs were Diana Dimitriuc-Quaia and Jessica R. DiPietro

. Daniel F. Roland , Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant United States. With him on the briefs were Brian M. Boynton , Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director, and Claudia Burke , Assistant Director. Of counsel on the briefs was Paul K. Keith , Assistant Chief Counsel, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce.Court No. 22-00120 Page 2 Elizabeth J. Drake , Schagrin Associates, of Was hington, D.C., for defendantintervenor. With her on the briefs were Roger B. Schagrin , Luke A. Meisner , and Justin M. Neuman

. Stanceu, Judge: Plaintiff brough t this action to contes t a determination of the International Trade Administration, U.S. De partment of Commerce (“Commerce” or the “Department”) in a counterv ailing duty (“CVD”) investigat ion of imported granular polytetrafluoroethylene (“PTFE”) resin from Ind ia. In the contested decision (the “Final Determination”), Commerce concluded that p laintiff Gujarat Fluo rochemicals Limited (“Gujarat Fluorochemicals” or “GFCL”) received countervailable subsidies from ten Indian government programs and assigned Gujarat Fluorochemicals an estimated total countervailable subsidy rate of 31.89%. Gujarat Fluorochemicals c hallenged the Department’s fi ndings involv ing two of the ten government programs. Principally, GFCL contested the Department’s including in the 31.89% total subsidy rate a rate of 26.50% for what Commerce considered to be a countervailable subsidy stemming from a 30-year lease of land to a GFCL affiliate, Inox Wind Limited (“IWL”), by the State Indust rial Development Corporation (“SIDC”). Gujarat Fluorochemicals also contested the inclusion of a subsidy rate of 0.12% for land Gujarat Fluorochemicals obtained from the Gujarat Industrial Development Corporation (“GIDC”). Before the court is the Department’s “Remand Redetermination,” issued in response to the court’s opinion and order in Gujarat Fluorochemicals Limited v. UnitedCourt No. 22-00120 Page 3

States , 47 CIT __, 617 F. Supp. 3d 1328 (2023) (“ Gujarat I”). Final Results of
Redetermination Pursuant to Court Remand (Feb. 23, 2023), ECF No. 63 (“ Remand Redetermination ”). Commerce, under protest, excl uded from GFCL’s overall subsidy rate the 26.50% subsidy rate pertaining to the SIDC’s lease of land to Inox Wind Limited. Also in response to the court’s or der, Commerce reconsidered its inclusion of a subsidy rate pertaining to the GIDC, conclu ding again that the inclusion of the 0.12% rate was appropriate. Based on those c hanges, Commerce determ ined a new subsidy rate of 5.39% for Gujarat Fluorochemicals and assigned that same rate as the “all others” rate for the investigation. The court sustains the Remand Redetermination.
I. B ACKGROUND Background on this case is presented in the court’s prior opinion and is briefly summarized and supplemented herein. Id ., 47 CIT at __, 617 F. Supp. 3d at 1330–31. Commerce published the conteste d “Final Determination” as Granular Polytetrafluoroethylene Resin From India: Final Affirmative Countervailing Duty Determination and Final Affirmative Cr itical Circumstances Determination , 87 Fed. Reg. 3,765 (Int’l Trade Admin. Jan. 25, 2022). Co mmerce incorporated by reference an explanatory document, the “Final Is sues and Decision Memorandum.” Issues and Decision Memorandum for the Final Affirmativ e Determination of the Countervailing DutyCourt No. 22-00120 Page 4 Investigation of Granular Polytetrafluoroethylene Resin from India (Int’l Trade Admin. Jan. 18, 2022), P.R. 248. 1
Commerce filed the Remand Redeterminati on on February 23, 2023. Plaintiff Gujarat Fluorochemicals and defendant- intervenor Daikin America, Inc. (“Daikin”)
submitted comments on the Remand Redeter mination. Comments on Remand Results of Def.-Int. Daikin America Inc. (Mar. 9, 2023), ECF No. 64 (“Def.-Int.’s Comments”); Pl.’s Comments on the Department of Comm erce’s Remand Redetermination (Mar. 9, 2023), ECF No. 66 (“Pl.’s Comments”). Defendant United States submitted responses to
those comments. Def.’s Re sp. to Comments on Remand Results (Mar. 16, 2023), ECF No. 67 (“Def.’s Resp.”).
II. D ISCUSSION A. Jurisdiction and Standard of Review The court exercises jurisdi ction according to sectio n 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), 2 pursuant to which the court reviews actions commenced under section 516A of the Tariff Act of 1930 (“Tariff Act”), as amended , 19 U.S.C. § 1516a, including an action contesting a final affirmative determination by

1 Documents in the Joint Appendix (Nov. 4, 2022), ECF Nos. 52 (Conf.), 53 (Public) are cited as “P.R. __.”

2 All citations herein to the United States Code are to the 2018 edition. All citations to the Code of Federal Regulations are to the 2022 edition.Court No. 22-00120 Page 5

Commerce of whether or not a countervailable subsidy is being provided with respect to merchandise subject to a coun tervailing duty investigation. See id

. §§ 1516a(a)(2)(B)(i), 1671d(a)(1). In reviewing an agency determination, the court “shall hold unlawful any determination, finding, or conclusion fo und . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” Id . § 1516a(b)(1).
Substantial evidence refers to “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” SKF USA, Inc. v. United States , 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB , 305 U.S. 197, 229 (1938)). B. Daikin’s Comments in Response to the Remand Redetermination In their comment submissions, Daikin and Gujarat Fluoro chemicals raised arguments in opposition to aspects of the Remand Redetermination, even though advocating also that the court sustain t he Remand Redetermination. Def.-Int.’s Comments 6; Pl.’s Comments 7. Defendant argues that the court should sustain the Remand Redetermination, which it describe s as “supported by substantial evidence.” Def.’s Resp. 3. The court has considered the objections Daikin and GFCL have raised to
the Remand Redetermination and concludes, for the reasons stated herein, that they do
not merit reconsideration of the decision the court reached in Gujarat I

. In its comments to the Remand Redeter mination, defendant-intervenor Daikin raises a new objection to the court’s opinion and order in Gujarat I , specifically takingCourt No. 22-00120 Page 6

issue with the court’s order therein direct ing Commerce to delete from GFCL’s overall rate the 26.50% subsidy rate for the lease of land by the SIDC to Inox Wind Limited. Daikin now argues that:
Daikin is concerned that the Remand Opinion [ Gujarat I ] misapplied the standard of review for antidumping and countervailing duty determinations by directing Commerce to delete the subsidy margin for this program and not allowing Comme rce to reconsider or more fully explain its original determination. . . . [B]ecause the Court directed a particular outcome on remand rega rding the provision of land by the SIDC and because Commerce refused to consider any comments on this aspect of its redetermination, Daik in is limited in these comments to reiterating its position supporting Commerce’s original determination in the underlying investigation and noting its disagreement with the substance and form of the Court’s Remand Opinion on this issue. Def.-Int.’s Comments 5–6. Daikin argues that “[t]he Federal Circuit has explained that the statute permits the Court of International Trade to remand an agency decision for
further consideration consist ent with its decision, but the statute does not permit the Court of International Trade to ‘outright revers[e] a decision by Commerce . . . .’” Id . at 5 (emphasis added) (quoting Ad Hoc Shrimp Trade Action Comm. v. United States , 515 F.3d 1372, 1383 (Fed. Cir. 2008) (“ Ad Hoc Shrimp ”) and citing 19 U.S.C. § 1516a( c)(3)). Daikin maintains that the court impermissibly directed Co mmerce, upon remand, to “outright reverse” the decision the agency reached on the land lease to Inox Wind Limited. Daikin is not correct in asserting that the court was required to issue another
remand order to allow Commerce to “reconsi der or more fully explain its original
determination.” Id . As the court explains below, a second remand could not haveCourt No. 22-00120 Page 7 produced an outcome as to t he lease of land by the SIDC to Inox Wind Limited differing from the one the court ordered. Accordingly , the course of action Daikin advocates would have delayed this litigation, imposed unnecessary burdens on the parties, and been unfair to plaint iff as to the claim on which it prevailed. Because the decision to impose a counte rvailing duty for the land lease to Inox Wind Limited resulted entirely from the Depa rtment’s erroneous interpretation of its own regulation, another remand to the ag ency could not have produced a different result, i.e., a result in which a countervailable subsidy for the lease of land by the SIDC to IWL would have been legally permis sible. Specifically, the court in Gujarat I concluded that the regulation involved, 19 C.F.R. § 351.525(b)(6)(iv), which was “part of a comprehensive revision of countervailing duty regulations following enactment of the Uruguay Round Agreements Act,” was intend ed to address “the situation where a subsidy is provided to an input producer whose production is dedicated almost exclusively to the production of a hig her value added product—the type of input product that is merely a link in the overall production chain.” Id ., 47 CIT at __, 617 F. Supp. 3d at 1336 (quoting Countervailing Duties , 63 Fed. Reg. 65,348, 65,401 (Int’l Trade Admin. Nov. 25, 1998)). The co urt noted that the preamble to the 1998 promulgation of the regulation provided “t hree examples that illustrate the intended meaning of the term ‘primarily dedicated to the production of the downstream product,’” which “clarify that the term pertains to the role the input performed, in theCourt No. 22-00120 Page 8 physical sense, in the production of the down stream product rather than whether the input was provided ‘primarily’ to the producer of that product.” Id . Thus, the court found that “[e]lectricity used to power an entire production plant,” like the electricity provided by Inox Wind Limited to GFCL, “c annot fairly be characterized as ‘merely a link in the overall production chain’ of the finished products that are made there.” Id ., 47 CIT at __, 617 F. Supp. 3d at 1337 (citation omitted). Electricity “is energy, and, being of universal application, is not remotely de scribable as an upstream product that is ‘primarily dedicated to the production of the downstream product’ as is required by § 351.525(b)(6)(iv).” Id . Thus, the court concluded, “elec tricity cannot be shown on this record to be ‘primarily dedicated’ either to Gujarat Fluorochemicals’s PTFE resin or to the production of any other (unidentified) pr oducts made at GFCL’s facilities, when the term ‘primarily dedicated’ is given its correct meaning.” Id ., 47 CIT at __, 617 F. Supp. 3d at 1340. The regulation aside, no authority available to Commerce would have allowed imposition of a countervailing duty for t he land lease to Inox Wind Limited. As the court noted, “Commerce did not conduct an upstream subsidy investigation” as defined in Section 771A of the Tariff Act, 19 U.S.C. § 1677-1. Id. , 47 CIT at __, 617 F. Supp. 3d at 1334. Had Commerce attempte d to conduct such an upstream subsidy investigation, it would have had to disregard uncontradicted record evidence that “only approximately 0.07% of the electricity” used by GFCL was “supplied by IWL” andCourt No. 22-00120 Page 9 “went to the production of the merchan dise subject to the investigation.” Id ., 47 CIT at __, 617 F. Supp. 3d at 1334–35 (citing 19 U.S.C. § 1677-1(a)(3) (allowing an upstream subsidy where the input product “has a signif icant effect on the cost of manufacturing or producing the merchandise.”)). The court explained that the “error in the interpretation of § 351.525(b)(6)(iv) le d Commerce to the wrong conclusion,” id ., 47 CIT at __, 617 F. Supp. 3d at 1337, and that the proper interpretation of the regulation, as informed by its history and purpose, render ed “the inclusion of the 26.50% estimated subsidy rate . . . contrary to law,” id ., 47 CIT at __, 617 F. Supp. 3d at 1341. The court held, accordingly, that the only lawful acti on that Commerce could take upon remand would be to delete the 26.50% rate from the overall subsidy rate. Id

. The court concluded in Gujarat I , and reiterates here in response to defendant-intervenor’s comments, that t he Department’s interpretation of the regulation was not owed deference. See Def.-Int.’s Comments 5 (citing Auer v. Robbins , 519 U.S. 452, 461 (1997) and Kisor v. Wilkie , 139 S.Ct. 2400, 2415–2418 (2019)); see also Suppl. Br. of Def.-Int. Daikin America Inc. (Jan. 20, 2023), ECF No. 58 . Further, the court explained, and restates here, that “[t]he counte rvailing duty investigation is completed and its outcome reviewed judicially as a fi nal determination on the agency record.” Gujarat I , 47 CIT at __, 617 F. Supp. 3d at 1341. Having produced a Final Determination that was contrary to law, Commerce was not entitled, in the circumstance presented, to an opportunity to redo its investigation, and no principle of law no w requires the courtCourt No. 22-00120 Page 10 to provide such an opportunity, contrary to what defendant-intervenor posits. Def.- Int.’s Comments 5 (expressing concern that the court in Gujarat I “misapplied the standard of review” by “not allowing Commerce to reconsider or more fully explain its original determination”). 3 This Court, like any Article II I court, must have the ability to decide whether an agency has or has not co rrectly interpreted its own regulation. Where, as here, a judicial decision on the validit y of the agency’s legal interpretation is controlling on the issue presented by plaintiff ’s claim, this Court must have the ability to order the remedy compelled by the court’s de cision on the legal question presented.

See 28 U.S.C. § 1585 (granting the Court of Inte rnational Trade all the powers in law and equity of a district court).

3 During oral argument, defendant-intervenor did not dispute that the 26.50% subsidy rate must be deleted from Gujarat Fluorochemicals’s overall subsidy rate if the regulation, 19 C.F.R. § 351.525(b)(6)(iv), is determ ined to be inapplicable to the facts of this case: The court: So, in other words, you agree wi th the plaintiff on at least one thing. If the reg[ulation] doesn’t apply, ther e’s no 26.5 [percent]. In fact, there’s nothing.
Defendant-Intervenor’s counsel: If the regulation does not apply, if the words “downstream product” in fact mean “s ubject merchandise,” then Commerce would have a problem. The court: You’d agree with me t here’d be no countervailing duty?
Defendant-Intervenor’s counsel: If it had to be pr imarily dedicated to “subject merchandise” versus “downstream product.” Oral Argument at 2:21:02.Court No. 22-00120 Page 11 Daikin’s argument is unpersuasive for anoth er reason: a precedent upon which it relies, Ad Hoc Shrimp, is not on point. Daikin cites that decision in support of a blanket proposition that 19 U.S.C. § 1516a does not perm it the Court of International Trade to “outright reverse a decision by Commerce.” Def.-Int.’s Comments 5 (quoting Ad Hoc Shrimp , 515 F.3d at 1383). However, the fa cts, and therefore the holding, of Ad Hoc Shrimp are readily distinguished from this case. In Ad Hoc Shrimp , plaintiffs-appellants contested a final antidump ing duty determination i ssued by Commerce, which excluded certain products from the scope of the investigation; plaintiffs in that case requested that this Court remand the determ ination to Commerce with instructions to amend the antidumping duty order to includ e those excluded products. This Court dismissed the plaintiffs’ challenge on the gr ounds that (i) it lacked the authority to amend the antidumping order itself, and (ii) it lacked j urisdiction to remand the determination back to Commerce, reasoning t hat because the U.S. International Trade Commission (“ITC”) had already made its fi nal injury determin ation based on the Department’s findings (including determinatio ns on scope), a decision plaintiffs did not appeal, such a remand would be futile. Ad Hoc Shrimp Trade Action Comm. v. United States, 31 CIT 102, 112–116, 473 F. Supp. 2d 1336, 1345–48 (2007). The Court of Appeals for the Federal Circuit, although affirming on the first ground, reve rsed on the second ground, concluding that the contested de cision should have been remanded to Commerce even though “ITC action will also be necessary before the antidumpingCourt No. 22-00120 Page 12

order itself can be amended.” Ad Hoc Shrimp , 515 F.3d at 1383. In contrast to the unusual circumstance presented in Ad Hoc Shrimp , the land lease to Inox Wind Limited presented a straightforw ard issue of regulatory interpre tation that was controlling on the validity of plaintiff’s claim. Another important consideration is that a second remand unnecessarily would have delayed the proceeding, required addi tional briefing under USCIT Rule 56.2, and burdened the parties and the court, all for no purpose. See USCIT Rules 1, 56.2. A second remand would have been particular ly burdensome and unfair to the plaintiff, which successfully contested the inclusion of a subsidy rate for the SIDC’s lease of land
to Inox Wind Limited and is entitled to a re medy that excludes that rate from the overall subsidy rate. Daikin’s argument disr egards the court’s obligation to order the remedy for which plaintiff has qualified an d to apply USCIT Rule 56.2 “to secure the just, speedy, and inexpensive determinat ion” of this action. USCIT R. 1. C. Gujarat Fluorochemicals’s Commen ts in Response to the Remand Redetermination
In its comments on the Remand Redeter mination, plaintiff GFCL expressed support for the Remand Redetermination wi th respect to the removal of the 26.50% subsidy rate. Pl.’s Comments 4. However, Gujarat Fluorochemicals objected to the Department’s determination concerning the continued inclusion of the 0.12% subsidy rate in GFCL’s overall rate, arguing that “Commerce’s benefit calculation and
benchmark determination for the GIDC’s provision of land remain unsupported by theCourt No. 22-00120 Page 13 record evidence and contrary to law.” Id . at 2. Nonetheless, GFCL noted that it “has decided not to pursue this argument,” id ., and “will not request a second remand to the agency on the this [sic] issue,” id . at 7, thereby foregoing its right to appeal this issue
further in the interest of obtainin g “expeditious corrective action,” id . at 2. GFCL thus has waived the very objection it lodg es against the Remand Redetermination.
III. C ONCLUSION For the foregoing reasons, the court finds Daikin’s and Gujarat Fluorochemicals’s new arguments unavailing and will ent er judgment sustaining the Remand
Redetermination. /s/ Timothy C. Stanceu Timothy C. Stanceu Judge Dated: October 13, 2023 New York, New York