Slip Op. 15- 45

UNITED STATES COURT OF INTERNATIONAL TRADE

CS WIND VIETNAM CO., LTD. and CS 

WIND CORPORATION,

Plaintiffs,

v.

UNITED STATES, 

Defendant, 

WIND TOWER TRADE COALITION, 

Defendant-Intervenor.

Before: Jane A. Restani, Judge 

Court No. 13-00102

OPINION

[Commerce’s Results of Redetermination in antidumping duty investigation sustained.] 

Dated: May 11, 2015 

Bruce M. Mitchell, Andrew B. Schroth, Ned H. Marshak, Dharmendra N. Choudhary, 

and Kavita Mohan, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, of New York, 

NY, and Washington, DC, for the plaintiffs. 

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. 

Department of Justice, of Washington, DC, for the defendant. With him on the brief were 

Benjamin C. Mizer, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and 

Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Lisa W. Wang, 

Attorney, Office of the Chief Counsel for Trade Compliance and Enforcement, U.S. Department 

of Commerce, of Washington, DC. 

Robert E. DeFrancesco, III, Alan H. Price, and Daniel B. Pickard, Wiley Rein, LLP, of 

Washington, DC, for the defendant-intervenor. 

Restani, Judge: Currently before the court is the U.S. Department of Commerce’s 

(“Commerce”) Final Redetermination Pursuant to Court Order, ECF No. 82 (“Second Remand 

Results”). The court remanded to Commerce for reconsideration or further explanation of its 
Court No. 13-00102 Page 2 

calculation of the surrogate financial ratios used in determining the antidumping (“AD”) duty 

margin for plaintiffs CS Wind Vietnam Co., Ltd. and CS Wind Corporation (collectively “CS 

Wind”). CS Wind Vietnam Co. v. United States, Slip Op. 14-128, 2014 Ct. Int’l Trade LEXIS 

129 (CIT Nov. 3, 2014) (“CS Wind II”). Commerce’s revised calculations are supported by 

substantial evidence, and the Second Remand Results are sustained. 

BACKGROUND

Following a petition by defendant-intervenor Wind Tower Trade Coalition (“WTTC”), 

Commerce conducted an AD investigation into certain wind towers from Vietnam. CS Wind 

Vietnam Co. v. United States, 971 F. Supp. 2d 1271, 1275 (CIT 2014) (“CS Wind I”). Because 

Vietnam is a non-market economy, in determining the proper AD duty margin, Commerce was 

required to calculate a normal value for the wind towers based on surrogate data from a country 

that is a significant producer of comparable products and similar economic development (the 

“surrogate country”). 19 U.S.C § 1677b(c)(4) (2012). In this context, calculating normal value 

essentially estimates the cost of producing the product were the producer to hypothetically 

operate in a market economy and involves calculating the factors of production for the subject 

merchandise, such as labor, raw materials, energy, and the cost of capital. Id. § 1677b(c)(3); see 

also Guangdong Chems. Imp. & Exp. Corp. v. United States, 30 CIT 1412, 1422, 460 F. Supp. 

2d 1365, 1373 (2006); Hebei Metals & Minerals Imp. & Exp. Corp. v. United States, 29 CIT 

288, 303 n.7, 366 F. Supp. 2d 1264, 1277 n.7 (2005). The governing statute, 19 U.S.C. 

§ 1677b(c)(1)(B), also requires that normal value include amounts for “general expenses and 

profit” in addition to the cost of the surrogate values for the factors of production. Guangdong 

Chems., 30 CIT at 1422, 460 F. Supp. 2d at 1373; Hebei Metals, 29 CIT at 303 n.7, 366 F. Supp. 

2d at 1277 n.7.
Court No. 13-00102 Page 3 

In calculating the “general expenses and profit” to be included in normal value, 

Commerce generally uses Selling, General, and Administrative (“SG&A”) and overhead expense 

ratios as well as profit ratios (collectively “surrogate financial ratios”). See Guangdong Chems., 

30 CIT at 1422, 460 F. Supp. 2d at 1373; Hebei Metals, 29 CIT at 303 n.7, 366 F. Supp. 2d at 

1277 n.7. The surrogate financial ratios are derived from the financial statements of one or more 

surrogate companies that produce comparable merchandise in the surrogate country. See Hebei 

Metals, 29 CIT at 303 n.7, 366 F. Supp. 2d at 1277 n.7. The SG&A ratio is calculated by 

dividing the surrogate company’s SG&A costs by the total cost of manufacturing, the overhead 

ratio is calculated by dividing total manufacturing overhead expenses by total direct 

manufacturing expenses, and the profit ratio is calculated by dividing the before-tax profit of the 

surrogate company by the sum of direct expenses, manufacturing overhead, and SG&A 

expenses. Id. The surrogate financial ratios are then applied to the factors of production values 

and the result is added to the factor of production value to determine normal value. See 

Guangdong Chems., 30 CIT at 1422, 460 F. Supp. 2d at 1373; Hebei Metals, 29 CIT at 303 n.7, 

366 F. Supp. 2d at 1277 n.7.

Based on its calculations of CS Wind’s normal value, Commerce subsequently assigned 

CS Wind a weighted-average dumping margin of 51.50%. Utility Scale Wind Towers from the 

Socialist Republic of Vietnam: Final Determination of Sales at Less than Fair Value, 77 Fed. 

Reg. 75,984, 75,988 (Dep’t Commerce Dec. 26, 2012) (“Final Determination”); Issues and 

Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of 

Utility Scale Wind Towers from the Socialist Republic of Vietnam, A-552-814 (Dec. 17, 2012), 

available at http://enforcement.trade.gov/frn/summary/vietnam/2012-30944-1.pdf (last visited 

Apr. 28, 2015) (“I&D Memo”). CS Wind challenged Commerce’s Final Determination on six 
Court No. 13-00102 Page 4 

grounds; relevant to the remand determination currently before the court is CS Wind’s argument 

that Commerce improperly calculated the surrogate financial ratios, specifically overhead 

expenses, using Ganges Internationale Private Limited’s (“Ganges”) April 1, 2010–March 31, 

2011 financial statement.1

 In calculating the surrogate financial ratios, Commerce is limited in 

its ability to look beyond the face of the financial statements because it cannot compel 

information from the surrogate companies, as those companies are not parties to the 

investigation. See Thai Plastic Bags Indus. Co. v. United States, 949 F. Supp. 2d 1298, 1305–08 

(CIT 2013).

In the Final Determination, Commerce treated the line item “Jobwork Charges (including 

Erection and Civil Expenses)” as part of overhead expenses in calculating the surrogate financial 

ratios. I&D Memo at 26. Commerce argued this was proper because jobwork charges are thirdparty expenses and it is Commerce’s practice to include such miscellaneous expenses in 

overhead when direct labor and energy expenses are listed separately in the financial statement.2

Id. Jobwork expenses normally refer to the costs paid to third parties to whom raw materials are 

sent to manufacture finished goods and thus do not include the cost of raw materials (which are 

captured elsewhere) or direct labor (which is not utilized because the third party’s labor is used).

See Pls.’ Cmts. in Resp. to the Dep’t of Commerce’s Final Results of Second Remand 

1

 Prior to the Final Determination, CS Wind advocated for the use of Ganges as the surrogate 

company for surrogate financial ratio purposes. Commerce accepted CS Wind’s argument and 

the parties have not challenged the use of Ganges’ financial statement, although it is apparent 

from the complex and technical nature of the dispute about the surrogate financial ratios that 

Ganges’ financial statement is not a perfect fit. See CS Wind I, 971 F. Supp. 2d at 1285–87. 

2

 By including jobwork charges in overhead expenses, Commerce rejected CS Wind’s argument 

that they be included as labor expenses, because, according to Commerce, treating them as labor 

would have resulted in double counting. I&D Memo at 26. 
Court No. 13-00102 Page 5 

Redetermination 13, ECF No. 84 (“Pls.’ Cmts.”). The dispute in this case centered on the 

inclusion of erection and civil expenses within jobwork charges, because it is unclear whether 

those expenses are also third-party expenses which would be properly included in overhead, and 

what offsets are applicable. When Commerce includes overhead expenses, it typically offsets 

those expenses with related income line items. Here, although Commerce offset “Jobwork 

Charges (including Erection and Civil Expenses)” with “Sales of Jobwork,” it did not offset them 

with “Erection Income” and “Civil Income.”3

 See CS Wind I, 971 F. Supp. 2d at 1285; Results 

of Redetermination Pursuant to Court Order 15, ECF No. 57 (“First Remand Results”). 

Offsetting “Erection Income” and “Civil Income” against jobwork charges would have 

reduced overall overhead expenses, reduced the overhead ratio, and ultimately resulted in a 

lower normal value, and thus, a lower AD duty margin. Without the offsets, the resulting 

surrogate financial ratios for overhead and SG&A expenses were 21.71% and 10.42%, 

respectively, and the AD duty margin was set at 51.50%. Final Determination, 77 Fed. Reg. at 

75,988; First Remand Results at 17–18. The profit ratio was 0.58% and has remained unchanged 

throughout the remand proceedings. First Remand Results at 18; Second Remand Results at 7; 

Final Surrogate Value Memorandum, Ex. 6 Financial Ratios Calculation, bar code 3111181-01 

(Dec. 17, 2012). The court held that Commerce’s apparent disparate treatment of jobwork, 

erection, and civil expenses and jobwork, erection, and civil income warranted a remand. CS 

Wind I, 971 F. Supp. 2d at 1287. The court reasoned that the similarity of the language between 

3

 CS Wind filed a ministerial error allegation claiming that this was a calculation error. 

Commerce denied the ministerial error allegation, claiming that it intentionally did not offset 

jobwork charges with “Erection Income” and “Civil Income” because erection and civil income 

did not meet the definition of “miscellaneous income items,” which are the only line items 

Commerce typically offsets against overhead expenses. See CS Wind I, 971 F. Supp. 2d at 

1285–86.
Court No. 13-00102 Page 6 

the expense and income line items rendered Commerce’s decision to offset “Jobwork Charges 

(including Erection and Civil Expenses)” with only “Sales of Jobwork,” but not with “Erection 

Income” or “Civil Income,” unsupported by substantial evidence. Id. 

In its first remand redetermination, Commerce decided not to rely on its original 

methodology. Rather, Commerce reconsidered and revised its calculations. Commerce 

continued not to offset “Erection Income” and “Civil Income” against overhead expenses. First 

Remand Results at 16. Instead, Commerce attempted to include in overhead expenses only the 

portion of “Jobwork Charges (including Erection and Civil Expenses)” not associated with 

erection and civil income activities. See id. at 16–18. Under Commerce’s rationale, if the 

portion of jobwork charges associated with erection and civil expenses were excluded from 

overhead expenses, there would be no reason to offset overhead expenses with “Erection 

Income” and “Civil Income.” Commerce thus would have complied with the court’s directive to 

treat income and related expense line items similarly or explain why they should not be treated 

similarly. See CS Wind I, 971 F. Supp. 2d at 1287. Unfortunately, Ganges’ financial statement 

did not specify the amount of “Jobwork Charges (including Erection and Civil Expenses)” 

associated with only erection and civil expenses. Accordingly, Commerce derived that portion 

of the expense by calculating a ratio of erection and civil income to the total income associated 

with jobwork (hereinafter “erection/civil income ratio”). First Remand Results at 17. 

Commerce assumed that the ratio, based on the income side of the financial statement, would be 

the same on the expense side of the financial statement. The parties have not specifically 

challenged that assumption. Commerce then multiplied “Jobwork Charges (including Erection 

and Civil Expenses)” by the erection/civil income ratio to determine the portion of “Jobwork 

Charges (including Erection and Civil Expenses)” to be excluded from overhead expenses. Id. 
Court No. 13-00102 Page 7 

In calculating the total income associated with jobwork (as a substitute for expenses), 

Commerce aggregated “Sales of Jobwork,” “Erection Income,” “Civil Income,” “Sale of 

Finished Goods,” “Scrap,” “Miscellaneous Income,” and “Services income from TSP activities.” 

See CS Wind II, 2014 Ct. Int’l Trade LEXIS 129, at *17–18. Based on these changes, the 

overhead and SG&A expense ratios changed from 21.71% and 10.42% to 20.22% and 10.50%, 

respectively.4

 First Remand Results at 18. Based on all of the changes made in the First 

Remand Results, the AD duty margin was reduced to 17.07%. First Remand Results at 37. The 

court determined that although Commerce’s revised methodology might be “a reasonable 

approach in theory,” Commerce failed to provide adequate explanation in support of its 

calculation, specifically, how and why it included certain line items in calculating the total 

income associated with jobwork. CS Wind II, 2014 Ct. Int’l Trade LEXIS 129, at *16–20. The 

court remanded the issue for reconsideration or further explanation once again. Id. at *20. 

In its second remand determination, Commerce continues to utilize the same 

methodology for calculating overhead expenses, but rather than merely explaining that 

methodology, further refines its calculation. Commerce continues to include “Sales of 

Jobwork,” “Erection Income,” “Civil Income,” “Sales of Finished Goods,” and “Scrap” in the 

denominator of the erection/civil income ratio, as it asserts those line items are associated with 

jobwork.5

 Second Remand Results at 5–6. Commerce also revises the erection/civil income 

4

 The parties do not challenge the methodology for making changes to the SG&A ratio 

corresponding to the changes to the overhead ratio. 

5

 Commerce now excludes “Services Income from TSP Activities” and “Miscellaneous Income” 

from the calculation because Ganges’ financial statement does not provide evidence as to 

whether these income line items relate to jobwork. Second Remand Results at 5. (continued...) 
Court No. 13-00102 Page 8 

ratio to exclude the portion of revenues from “Sales of Finished Goods,” “Scrap,” “Erection 

Income,” and “Civil Income” related to raw materials and direct labor. Id. at 7–8, 12–13. In 

doing so, Commerce calculates a ratio of the sum of raw materials and direct labor expenses to 

the sum of raw materials, direct labor, energy, and overhead expenses (hereinafter “raw 

materials/direct labor ratio”),6

 and applies the resulting ratio to “Sales of Finished Goods,” 

“Scrap,” “Erection Income,” and “Civil Income” in the denominator, and to “Erection Income” 

and “Civil Income” in the numerator of the erection/civil income ratio.7

 Id.; Pls.’ Cmts. at 8. 

(continued...)

Neither CS Wind nor WTTC objects to these exclusions. The unadjusted erection/civil income 

ratio is thus:

ܽ ൌ

ܫܥ ൅ ܫܧ

݌ܽݎܵܿ ൅ ܩܨܱܵ ൅ ܫܥ ൅ ܫܧ ൅ ܹܬܱܵ

Where EI=Erection Income, CI=Civil Income, SOJW=Sales of Jobwork, and SOFG=Sales of 

Finished Goods. 

6

 The raw materials/direct labor ratio is thus: 

ܾ ൌ

ܮܦ ൅ ܯܴ

ܱ ൅ ܧ ൅ ܮܦ ൅ ܯܴ

Where RM=raw materials, DL=direct labor, E=energy, and O=overhead. The resulting ratio is 

82.03%. Second Remand Results at 13. 

7

 Although Commerce does not state that it also applied the raw materials/direct labor ratio to the 

numerator of the erection and civil income ratio in its Second Remand Results, it is apparent 

from the calculation. The result is the following: 

ܽሺ݆ܽ݀ݐݏݑ݁݀ሻ ൌ

ܫ כ ܥܾ ൅ ܫܧ כ ܾ

݌ܽݎܵܿ כ ܾ ൅ ܩܨܱܵ כ ܾ ൅ ܫܥ כ ܾ ൅ ܫܧ כ ܾ ൅ ܹܬܱܵ

Where b is the raw materials/direct labor ratio calculated above. The resulting ratio is 8.62%.

Second Remand Results at 13. This ratio is applied to the jobwork charges line item and the 

result is then used to reduce the jobwork charges line item, substituting for a partial direct offset 

to this overhead item. 
Court No. 13-00102 Page 9 

Due to the revisions adopted in the Second Remand Results, the overhead and SG&A expense 

ratios changed from 20.22% and 10.50% to 20.16% and 10.51%, respectively, and the AD duty 

margin was further reduced from 17.07% to 17.02%. Second Remand Results at 7–8. 

Both CS Wind and WTTC contest Commerce’s Second Remand Results and argue that 

Commerce should exclude “Sales of Finished Goods” and “Scrap” from the calculation of the 

erection/civil income ratio. See Pls.’ Cmts. at 9–11; Def.-Intvnr.’s Cmts. on Final 

Redetermination Pursuant to Court Order 3–5, ECF No. 85 (“Def.-Intvnr.’s Cmts.”). They also 

both argue that Commerce should not employ the raw materials/direct labor ratio, albeit for 

different reasons. See Pls.’ Cmts. at 11–15; Def.-Intvnr.’s Cmts. at 3–5.

CS Wind argues that Commerce’s analysis is circular and confusing because Commerce 

has misinterpreted the scope of erection and civil income. Pls.’ Cmts. at 9–12. CS Wind 

reasserts its argument that Commerce’s entire methodology is unnecessary and could be avoided 

by simply including the entire value of “Jobwork Charges (including Erection and Civil 

Expenses)” in overhead and offsetting that value with “Sales of Jobwork,” “Erection Income,” 

and “Civil Income.” Id. at 16–17. Alternatively, if the court accepts Commerce’s methodology, 

CS Wind claims that “Sales of Jobwork” encompasses all jobwork income and thus Commerce’s 

methodology unreasonably broadens the concept of jobwork income. Id. at 10–11. As for the 

inclusion of “Sales of Finished Goods” and “Scrap” as income associated with jobwork, CS 

Wind argues that Commerce has failed to appreciate the nuance that Ganges incurs jobwork 

expense, rather than receives jobwork income, when it produces finished goods via third parties 

on a jobwork basis. Id. at 9–10, 13. Thus CS Wind argues that Commerce should exclude those 

two line items from the denominator of the erection/civil income ratio. Id. at 16. 
Court No. 13-00102 Page 10 

Relative to the raw materials/direct labor ratio, CS Wind challenges Commerce’s 

decision to adjust “Sales of Finished Goods,” “Scrap,” “Erection Income,” and “Civil Income” 

for raw materials and direct labor but not for energy, overhead expenses, SG&A expenses, and 

profit. Id. at 12. CS Wind further claims that because erection and civil expenses are associated 

with jobwork charges, the corresponding income line items also relate only to jobwork income 

and are thus exclusive of raw materials and direct labor. Id. at 13. Therefore, there would be no 

need to apply the raw materials/direct labor ratio to those line items. Because CS Wind also 

argues that “Sales of Finished Goods” and “Scrap” should be excluded from the erection/civil 

income ratio, according to CS wind, the entire raw materials/direct labor ratio is unnecessary. 

See id. at 12–13.

WTTC argues that Commerce should revert to its decision in the Final Determination. 

Def.-Intvr.’s Cmts. at 5. WTTC contends that because jobwork charges are third-party expenses, 

the only offsets Commerce should allow against jobwork charges are those relating to third-party 

services generating income. Id. at 1. WTTC does not agree with CS Wind that because the 

language “Sales of Jobwork,” “Erection Income,” and “Civil Income” is similar to that of 

“Jobwork Charges (including Erection and Civil Expenses),” that those line items automatically 

should be offset. Id. at 1, 4. Rather, WTTC argues those line items incorporate more than thirdparty services generating income and thus should not be offset. Id. It argues alternatively that if 

the court determines that those three line items are sufficiently related to jobwork, “Sales of 

Finished Goods” and “Scrap” should not be included in calculating the total revenue associated 

with jobwork because they also do not involve third-party services income, but rather involve the 

generation of third-party expenses. Id. at 3–5. WTTC also argues against using a one-to-one 

offset of “Erection Income” and “Civil Income” because those income line items include raw 
Court No. 13-00102 Page 11 

materials and labor, but jobwork charges include only third-party labor services. Id. at 4–5.

WTTC does not present specific arguments for how Commerce should exclude income derived 

from raw materials and direct labor. 

JURISDICTION AND STANDARD OF REVIEW 

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court will uphold 

Commerce’s redetermination in an AD investigation unless it is “unsupported by substantial 

evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION 

I. Inclusion of “Sales of Finished Goods” and “Scrap”8

CS Wind argues that the inclusion of “Sales of Finished Goods” and “Scrap” as income 

line items associated with jobwork is erroneous because Ganges incurred jobwork expenses as 

opposed to receiving jobwork income when it produced a portion of its finished goods through 

jobwork by a third party. Pls.’ Cmts. at 9–11. Therefore, according to CS Wind, Commerce’s 

inclusion of “Sales of Finished Goods” and “Scrap” as income associated with jobwork is 

incorrect and unwarranted. Id. WTTC similarly argues that Commerce should exclude “Sales of 

Finished Goods” and “Scrap” from the calculation because Ganges’ financial statement provides 

no evidence that they are associated with third-party services income such as jobwork. Def.-

Intvnr.’s Cmts. at 3–5.

To support the inclusion of “Sales of Finished Goods,” Commerce reasons that because 

Ganges’ financial statement states that the finished goods manufactured by Ganges include 

“production done by 3rd parties on a jobwork basis,” it is reasonable to include “Sales of 

8

 Putting aside the parties’ more general objections, neither party specifically challenges 

Commerce’s inclusion of “Sales of Jobwork,” “Erection Income,” and “Civil Income” as income 

associated with jobwork in the denominator of the erection/civil income ratio. 
Court No. 13-00102 Page 12 

Finished Goods” in the total revenue associated with jobwork. Second Remand Results at 5–6; 

see also CS Wind Post-Preliminary Surrogate Value Submission Ex. 2A Ganges Internationale 

Financial Statement Schedule 21, item 14(a), bar code 3096954-01 (Sept. 14, 2012) (“Ganges’ 

Financial Statement”). As for “Scrap,” Commerce argues that because Ganges does not list 

scrap as a raw material input, but instead includes scrap as inventoried items (“stocks”), scrap 

sold must have been generated during the manufacturing of finished goods. Second Remand 

Results at 6; see also Ganges’ Financial Statement Schedule 21, item 14(a), (b). Thus, according 

to Commerce, because the company’s manufacturing process includes jobwork done by third 

parties, revenue derived from scrap generated during that process is similarly associated with 

jobwork. Second Remand Results at 6.

Commerce is attempting to derive reasonable surrogate financial ratios from the financial 

statement CS Wind selected. Commerce is afforded wide discretion in calculating normal value 

and in applying the guidelines of 19 U.S.C. § 1677b(c), particularly with respect to calculating 

overhead expenses. See Nation Ford Chem. Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 

1999); Peer Bearing Co. v. United States, 25 CIT 1199, 1216, 182 F. Supp. 2d 1285, 1306 (2001) 

(holding that “[a]lthough the Court could certainly question the perfection of Commerce’s 

approach, . . . Commerce attempted to capture . . . the surrogate company’s experience in 

incurring overhead and SG&A expenses, and created a reasonably internally consistent ratio that, 

as imperfect as it might be, does not violate the boundaries set by 19 U.S.C. § 1677b(c)”); 

Timken Co. v. United States, 25 CIT 939, 954–55, 166 F. Supp. 2d 608, 625 (2001) (holding that 

as long as Commerce’s surrogate overhead and SG&A ratios are “reasonabl[y] internally 

consistent,” they can be supported by substantial evidence). Because of the imperfect fit and 
Court No. 13-00102 Page 13 

ambiguities in the financial statement, Commerce has reasonably acted to derive a surrogate 

financial ratio that is supported by the record.

CS Wind is correct in saying that Ganges incurs jobwork expenses when it produces a 

portion of finished goods (as well as scrap) through jobwork done by third parties, the amount of 

which is likely captured by “Jobwork Charges (including Erection and Civil Expenses).” CS 

Wind, however, overlooks the fact that Ganges also receives income from the sale of finished 

goods and scrap and that a portion of that income is derived from jobwork. According to CS 

Wind, this income is included under “Sales of Jobwork,” which encompasses all income 

accruing from jobwork. Pls.’ Cmts. at 10–11. CS Wind’s argument, however, is untenable 

because CS Wind also acknowledges that Ganges’ jobwork income arises when it expends its 

own labor to process raw materials received from outside parties. Id. at 10. Ganges’ financial 

statement does not specify what is captured in “Sales of Jobwork” and, as indicated, Commerce 

is not equipped to look beyond the face of the financial statement. 

Logically, there is substantial evidence to support Commerce’s determination. It is a 

reasonable inference that the label—“Sales of Jobwork”—refers to revenue from jobwork 

performed by Ganges for outside parties, but not, as CS Wind argues, any income associated 

with jobwork, including revenues from the sale of finished goods and scrap produced through 

jobwork by third parties. The revenue accruing from the sale of finished goods and scrap is thus 

associated with jobwork, but is not captured in “Sales of Jobwork.” Therefore, Commerce’s 

inclusion of “Sales of Finished Goods” and “Scrap” in the total income associated with jobwork 

is supported by substantial evidence. 

Commerce’s methodology and calculations are arguably imperfect. Had Commerce 

drawn other inferences about the ambiguous term in the financial statement, a much simpler 
Court No. 13-00102 Page 14 

solution might have been simply to offset “Jobwork Charges (including Erection and Civil 

Expenses)” with “Sales of Jobwork,” “Erection Income,” and “Civil Income.” Commerce’s 

inclusion of “Sales of Finished Goods” and “Scrap” in the calculation of the erection/civil 

income ratio ultimately, however, was proper, and Commerce’s inferences are supported by 

substantial evidence, as indicated. See Nation Ford, 166 F.3d at 1377; Peer Bearing, 25 CIT at 

1216, 182 F. Supp. 2d at 1306.

II. Raw Materials/Direct Labor Ratio 

CS Wind also opposes Commerce’s calculation and application of the raw 

materials/direct labor ratio to four line items (“Sales of Finished Goods,” “Scrap,” “Erection 

Income,” and “Civil Income”) in the calculation of the erection/civil income ratio. Pls.’ Cmts. at 

11–15. CS Wind challenges the calculation of the ratio employed by Commerce with respect to 

“Sales of Finished Goods” and “Scrap” because the ratio addresses only direct labor and raw 

materials, but not other relevant factors, such as overhead and SG&A expenses, and profit, 

without any explanation. Id. at 11–12. Relative to the ratio’s application to “Erection Income” 

and “Civil Income,” CS Wind argues these line items in the financial statement should be 

interpreted to include only the cost of labor charges paid to third parties such that any revised 

raw materials/direct labor ratio need not be applied to those two line items. Id. at 13–15. CS 

Wind argues that because “Sales of Jobwork” should be interpreted to include only third-party 

labor costs, given the association of jobwork charges with erection and civil expenses, “Erection 

Income” and “Civil Income” should be interpreted in the same manner as “Sales of Jobwork.”

Id. Accordingly, because CS Wind contends that “Sales of Finished Goods” and “Scrap” should 

be excluded from the erection/civil income ratio and the raw materials/direct labor ratio does not 

apply to “Erection Income” and “Civil Income,” CS Wind essentially argues that the raw 
Court No. 13-00102 Page 15 

materials/direct labor ratio is completely unnecessary. See Pls.’ Cmt. at 9–16. WTTC, for its 

part, argues that Commerce should revert to its Final Determination and not offset any line 

items,9 but alternatively argues against a one-to-one offset of “Erection Income” and “Civil 

Income” against jobwork charges. Def.-Intvnr.’s Cmts. at 4–5; see also CS Wind I, 971 F. Supp. 

2d at 1285–87.

 The problem with Ganges’ financial statement for these purposes is that it does not 

identify the value of each income line item attributable to jobwork. Commerce thus needed to 

devise a methodology to distill the income related solely to jobwork. Accordingly, in its Second 

Remand Results, Commerce calculates a ratio of raw materials and direct labor expenses to the 

sum of raw materials, direct labor, energy, and overhead expenses. Second Remand Results at 

7–8, 12–13. Commerce argues that it seeks to exclude only raw materials and direct labor 

because the other expenses suggested by CS Wind (energy, overhead, SG&A, and profit) are 

associated with total jobwork expenses. Def.’s Resp. to Cmts. on Second Redetermination 

Pursuant to Ct. Remand 10–11, ECF No. 90 (Def.’s Resp.). Presumably, jobwork expenses do 

not include direct labor because in incurring jobwork expenses, raw materials are provided to 

third parties who perform the labor and thus no direct labor is utilized. Raw materials are 

reasonably excluded from jobwork expenses because the raw materials are provided to the third 

party who performs the labor and the raw material costs are separately accounted for elsewhere 

as a factor of production such that including them in jobwork expenses would result in double 

counting. Merely because jobwork is exclusive of raw materials and direct labor costs does not 

9

 Commerce decided after the court remanded the issue in CS Wind I not to explain its Final 

Determination more fully, but instead adopted a new methodology, which WTTC must now 

address. See First Remand Results at 14–18; see generally Second Remand Results. WTTC has 

failed to adequately challenge Commerce’s revised methodology. 
Court No. 13-00102 Page 16 

mean, however, that other expenses are not incurred. For example, administrative services might 

be used in organizing and managing the jobwork, and presumably some energy is necessary to 

maintain a suitable work environment. CS Wind’s argument that other expenses should be 

included in the raw materials/direct labor ratio, essentially eliminating the ratio by making it 

equivalent to one, are unpersuasive as those other costs are reasonably associated with total 

jobwork expenses. Accordingly, Commerce’s decision to adjust for only raw materials and 

direct labor is supported by substantial evidence, and Commerce’s calculation of the raw 

materials/direct labor ratio is supported by substantial evidence. See Nation Ford, 166 F.3d at 

1377; Peer Bearing, 25 CIT at 1216, 182 F. Supp. 2d at 1306. 

Relative to the application of the raw materials/direct labor ratio, in its Second Remand 

Results, Commerce applies the ratio to all variables in the erection/civil income ratio, other than 

“Sales of Jobwork.” Second Remand Results at 13. Commerce reasonably interprets this line 

item as expressly including only jobwork income. Id. Although CS Wind alleges that 

Commerce does not explain why Commerce applied the ratio to “Erection Income” and “Civil 

Income,” Commerce specified that it was treating “Erection Income” and “Civil Income” 

differently from “Sales of Jobwork” because they were listed separately from “Sales of Jobwork” 

on the income side of the financial statements. Pls.’ Cmts. at 11–12; Def.’s Resp. at 11. Thus, 

according to Commerce, they could not be presumed to be exclusive of direct labor and raw 

materials. Def.’s Resp. at 11. This inference is supported by substantial evidence, as there is no 

indication that “Erection Income” and “Civil Income” are not produced through direct labor or 

do not utilize raw materials, and Commerce’s rationale that the distinct treatment on the income 

side of the financial statement warranted disparate treatment is reasonable. Accordingly, 

although arguably imperfect, Commerce’s calculation and application of the raw materials/direct 
Court No. 13-00102 Page 17 

labor ratio is supported by substantial evidence. See Nation Ford, 166 F.3d at 1377; Peer 

Bearing, 25 CIT at 1216, 182 F. Supp. 2d at 1306.

CONCLUSION 

Given the necessity of using non-party surrogate financial statements that are not subject 

to in-depth investigation, Commerce has arrived at an overhead ratio that is a reasonable attempt 

to fulfill the statutory directive to calculate a complete normal value based on surrogate data. 

Commerce used the ambiguous financial statement proposed by CS Wind and drew adequately 

supported and internally consistent inferences about the ambiguities. That it might have drawn 

other inferences and thus used other methodologies does not undermine the result. Therefore, 

Commerce’s Second Remand Results are sustained and judgment will issue accordingly. 

 /s/ Jane A. Restani

 Jane A. Restani 

Judge

Dated: May 11, 2015

New York, New York