Slip Op. 09-118
UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________ : MTZ POLYFILMS, LTD., : : Plaintiff, : : v. : : UNITED STATES, : Before: WALLACH, Judge : Court No: 08-00089 Defendant, : : and : : TORAY PLASTICS (AMERICA), INC., : DUPONT TEIJIN FILMS USA, LP, SKC : AMERICA, INC., and MITSUBISHI : POLYESTER FILM OF AMERICA, LLC, : : Defendant-Intervenors. : : [Plaintiff’s Motion for Judgment on the Agen cy Record is DENIED and the Agency’s Determination is AFFIRMED.]

Dated: October 15, 2009 Riggle & Craven (David J. Craven ) for Plaintiff MTZ Polyfilms, Ltd. Tony West , Assistant Attorney General; Jeanne E. Davidson , Director, Patricia M. McCarthy , Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (David D’Alessandris ); and Carrie L. Owens , Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Counsel, for Defendant United States. Wilmer, Cutler, Pickering, Hale and Dorr, LLP (John D. Greenwald , Ronald I. Meltzer , and Patrick McLain ) for Defendant-Intervenors Dupont Teijin Films, Mitsubishi Polyester Film, Inc., SKC, Inc., and Toray Pl astics (America), Inc.2 I INTRODUCTION This action arises out of the administrativ e review of a countervailing duty order conducted by the United States Department of Commerce (“Commer ce”). Plaintiff MTZ Polyfilms, Ltd. (“MTZ”) challenges Commerce’s cal culation of the benef its it receives under a number of programs administered by the G overnment of India. MTZ also challenges Commerce’s decision to treat ce rtain programs as countervailable subsidies. This court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Because Commerce’s decisions are supported by substantial eviden ce and otherwise in ac cordance with law, Commerce’s determination in Po lyethylene Terephthalate Film, Sheet, and Strip from India: Final Results of Countervaili ng Duty Administrative Review , 73 Fed. Reg. 7,708 (February 11, 2008), as amended by Amended Final Results of Countervailing Duty Ad ministrative Review: Polyethylene Terephthalate (PET) Fi lm, Sheet, and Strip from India , 73 Fed. Reg. 15,135 (March 21, 2008) (together the “Final Results ”), is affirmed.

II BACKGROUND Commerce imposed a countervaili ng duty order on polyethylene terephthalate film, sheet, and strip from India in 2002. No tice of Countervailing Duty Orde r: Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From India , 67 Fed. Reg. 44,179 (July 1, 2002) (“CVD Order ”). In response to a request by MTZ, Commerce initiated an ad ministrative review of the CVD Order in 2006. Initiation of Antidumping and C ountervailing Duty Administrative Reviews and Requests for Revocation in Part , 71 Fed. Reg. 51,573, 51,575 (August 30, 2006).3 Thereafter, Commerce published the preliminary results of this administrative review. Polyethylene Film, Sheet, and Strip from India: Preliminary Results and Rescission, in Part, of Countervailing Duty Administrative Review , 72 Fed. Reg. 43,607 (August 6, 2007) (“Preliminary Results ”). After issuing the Preliminary Results , Commerce conducted verification in India in September 2007. See Verification of the Questionnaire Responses Submitted by the Government of India (December 7, 2007), Public Record (“P.R.”) 117, and Verification of the Questionnaire Responses Submitted by MTZ (December 7, 2007), P.R. 118. MTZ and the Defendant-Intervenors submitted briefing materials in December 2007. See, e.g. , Case Brief of MTZ Polyfilms, Ltd. (December 20, 2007), P.R. 123, and Rebuttal Brief on Behalf of DuPont Teijin Films, Mitsubishi Polyester Film of America, and Tory Plastics (America), Inc. (December 28, 2007), P.R. 130. Commerce held a hearing on January 10, 2008 and issued the final results of its administra tive review on February 11, 2008. Po lyethylene Terepthalate Film, Sheet, and Strip from India: Final Results of Countervailing Duty Administrative Review , 73 Fed. Reg. 7,708 (February 11, 2008). After Commerce issued these final results , MTZ submitted a request for Commerce to correct alleged ministerial errors. See Request for Correction of Mi nisterial Errors (February 11, 2008), P.R. 141. Before Commerce responded, MTZ initiated this action on March 10, 2008.
See Summons (March 10, 2008). Thereafter, Commerce published its response to MTZ’s allegations of ministerial error; Commerce accep ted MTZ’s argument with respect to calculation of the benefit MTZ derived from purchases within India’s Un ion Territories. See Amended Final Results of Countervailing Duty Administrative Review: Polyethyl ene Terephthalate (PET) Film, Sheet, and Strip from India , 73 Fed. Reg. 15,135, 15,135 (March 21, 2008). Commerce rejected MTZ’s other arguments. See id. at 15,135-36.4 III STANDARD OF REVIEW The court will hold unlawful a determin ation by Commerce resulting from an administrative review of a countervailing or an tidumping duty order if that determination is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i); see 19 U.S.C. § 1516a(a)(2)(B)(iii); see also GPX Int'l Tire Corp. v. United States , 2009 Ct. Intl. Trade LEXIS 108, at *8 (September 19, 2009) (applying a single standard of review to both countervailing a nd antidumping duty fina l determinations). A determination is supported by substantial evid ence if the record contains “evidence that a reasonable mind might accept as adequate to su pport a conclusion.” Cleo Inc. v. United States , 501 F.3d 1291, 1296 (Fed. Cir. 2007) (citing Universal Camera Corp. v. NLRB , 340 U.S. 474, 477, 71 S. Ct. 456, 95 L. Ed. 456 (1951)). While the court must consider contradictory evidence, “the substantial evidence test do es not require that there be an absence of evidence detracting from the agency’s conclusion, nor is there an ab sence of substantial evid ence simply because the reviewing court would have reac hed a different conclusion based on the same record.” Cleo Inc. , 501 F.3d at 1296 (citing Universal Camera Corp. , 340 U.S. at 487-88); see also Am. Silicon Techs. v. United States , 261 F.3d 1371, 1375-76 (Fed. Cir. 2001); U.S. Steel Group v. United
States , 96 F.3d 1352, 1356-57 (Fed. Cir. 1996). To determine whether Commerce’s interpreta tion and application of the countervailing and antidumping duty statute at issue is otherw ise “in accordance with law,” the court must conduct the two-step analysis articulated by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 842-43, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). Under the first step of the Chevron analysis, the court must ascertain “‘whether5 Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congre ss.’” Wheatland Tube Co. v. United States , 495 F.3d 1355, 1359 (Fed. Cir. 2007) (quoting Chevron , 467 U.S. at 842-43). The court reaches the sec ond step of the Chevron analysis only “‘if th e statute is silent or ambiguous with respect to the speci fic issue.’” Wheatland Tube Co. , 495 F.3d at 1359 (quoting Chevron , 467 U.S. at 843). Under this second step, th e court must evaluate whether Commerce’s interpretation “is based on a permissibl e construction of the statute.” Chevron , 467 U.S. at 843. The agency’s construction need not be the onl y reasonable interpretati on or even the most reasonable interpretation. See Zenith Radio Corp. v. United States , 437 U.S. 443, 450, 98 S. Ct. 2441, 57 L. Ed. 2d 337 (1978) (citations omitted). The court must defer to Commerce’s reasonable interpretation of a stat ute even if it might have adopte d another interpretation if the question had first arisen in a judicial proceeding. Id. (citations omitted).

IV DISCUSSION MTZ challenges several decisions made by Commerce during the course of the administrative review. MTZ challenges Commerce’ s calculation of the benefits received by MTZ under both the Duty Entitlement Passbook Scheme and the Export Promotion Capital Goods Scheme. MTZ also challenges Commer ce’s decisions to treat as countervailable subsidies both the Advance License Program and the Union Territory Central Sales Tax exemption.6 MTZ’s challenges are “bare assertions” that l ack “citation to any appl icable statutory or regulatory provisions.” 1 Fujian Lianfu Forestry Co., Ltd. v. United States , Slip Op. 09-81, 2009 Ct. Int’l Trade LEXIS 92, at *53 (August 10, 2009). These bare assertions represent only MTZ’s philosophical views as to how the lega l framework within which Commerce makes determinations in respect of subsidy program s should operate; they represent neither the standards governing how Commerce should de cide whether to trea t certain government programs as countervailable subsidies nor the standards governing how Commerce should calculate the benefits conferred under these programs. As the court noted in Fujian , “‘[i]ssues adverted to in a perfunctory manner, unaccompan ied by some effort at developed argumentation, are deemed waived. It is not enough merely to mention a possible argument in the most skeletal way, leaving the court to do counsel’s work, create the ossature for the argument, and put flesh on its bones.’” Fujian , 2009 Ct. Int’l Trade LEXIS at *53 (quoting United States v. Zannino , 895 F.2d 1, 17 (1st Cir. 1990)). Useful to this analysis is Carducci v. Regan , 714 F.2d 171 (D.C. Cir. 1982), in which then-Judge Scalia noted that “[t]he premise of our adversarial syst em is that appellate courts do not sit as self-directed boards of legal inquiry and research, but e ssentially as arbiters of legal questions presented and argued by th e parties before them.” Carducci , 714 F.2d at 177. Carducci adds that “[f]ailure to enforce the requirement” in Federal Rule of Appellate Procedure 28(a)(4) that briefs submitted by the parties contain citati on to the authorities and parts of the record relied on “will ultimately deprive [the court] in substantial measure of that assistance of counsel which the system assumes.” Id. These principles apply to ac tions brought in this court under 28

1 Given Plaintiff’s failures to cite legal authority for any of its propositions and to cite relevant record evidence, the court did not follow its routine practice of holding oral argument before deciding this motion.7 U.S.C. ' 1581(c), where the court’s mandate is to sustain Commerce’s determinations unless they are “‘unsupported by substantial evidence on the record, or otherwise not in accordance with law.’” Carpenter Tech. Corp. v. United States , 510 F.3d 1370, 1373 (Fed. Cir. 2007) (quoting 19 U.S.C. ' 1516a(b)(1)(B)(i)) (as discussed in Section III above). Like the Federal Rule of Appellate Procedure referred to in Carducci , USCIT Rule 56.2(c)(2) provides that briefs supporting motions for judgment on the agency record filed in actions arising under 28 U.S.C. ' 1581(c) “must include the authorities relied on and the conclusions of law deemed warranted by the authorities” USCIT Rule 56.2(c)(2) (emphasis added). Because MTZ has made “no effort at identifying the [applicable] standards” and, thus, failed to provide the court with a basis “against which [it can] review the reasonableness” of Commerce’s determinations, the court need not entertain MTZ’s challenges. Fujian at *54 (endorsing the rationale articulated in Zannino , 895 F.2d at 17). Thus, the court simply does not need to go beyond this point in its analysis. Nevertheless, the court has reviewed the determinations challenged by MTZ against the ap plicable legal framework and concluded that they should be sustained.
A Commerce Properly Calculated The Benefi t Conferred Upon MTZ By The Duty Entitlement Passbook Scheme Under the Duty Entitlement Passbook Scheme (“DEPS”), which the Government of India enacted in 1997, exporters can earn import duty ex emptions in the form of “passbook credits” rather than cash. Issues and Decision Memorandu m in the Final Results of the Countervailing Duty Administrative Review of Polyethylene Te rephthalate Film, Sheet, and Strip from India (February 4, 2008) (“Final Deci sion Memo”), P.R. 139, at 12. Th ese credits are issued as a license following the exportation of each eligible shipment and are valid for twelve months. Id.8 at 12-13. They can be applied against duties on any subsequent imports, including those imports that are not utilized in the produc tion of an exported product, and they are transferable after the foreign exchange is realized from the export sales upon which they were earned. Id. Commerce “has previously determined that th e [DEPS] is countervailable” and considers the DEPS benefit to be the full “amou nt of the duty exemptions.” Id. ; see also Remission or Drawback of Import Charges Upon Export , 19 C.F.R. § 351.519(a)(4). A DEPS benefit is “conferred as of the date” that the associated sh ipment is exported rath er than the subsequent date that the associated DEPS license is issue d. Final Decision Memo at 13 (citing 19 C.F.R. § 351.519(b)(2)). Accordingly, Commerce’s calculati on of the DEPS benefit should in principle exclude shipments exported prior to the period of review even if the licenses associated with those shipments are issued with in the period of review. See Memorandum from Elfi Blum, International Trade Compliance Analyst, to Barb ara E. Tillman, Director , Office 6, Re: Analysis of Ministerial Error Allegations in Final Re sults of countervailing [sic] Duty Review on Polyethylene Terephthalate Film, Sheet, and Strip from India (March 12, 2008), P.R. 146 (“Ministerial Error Memo”), at 2-3. MTZ alleges that Commerce’s calculation e rroneously included shipments that were exported prior to the period of review. Moti on for Judgment on the Agency Record Submitted Pursuant to Rule 56.2 of the Rules of the U.S. C ourt of International Trad e (“Plaintiff’s Motion”) at 10-13. MTZ does not specifically identify such shipments. See id. However, MTZ does identify a discrepancy between data in the admi nistrative record and the result of Commerce’s calculation, which discrepancy it attributes to the inclus ion of such shipments. To calculate MTZ’s DEPS benefit, Commerce be gan with “the value of all post-export credits that . . . MTZ earned for all export shipme nts,” subtracted application fees paid by MTZ,9 and “divided the resulting amount[] by . . . MTZ’ s total exports . . . during the [period of review].” Final Decision Memo at 13. The resu lt of this calculation was a DEPS benefit of 12.78% ad valorem. Id. However, as MTZ notes, the actual DEPS benefit to MTZ never exceeded 11% ad valorem on any single shipment during the period of revi ew. Plaintiff’s Motion at 12; see Response to the Countervailing Duty Suppl emental Questionnaire by MTZ Polyfilms, Ltd. (April 18, 2007), Exhibit S-10 , Confidential Record (“C.R.”) 6. In other words, the mean value calculated by Commerce (12.78%) is greater than the maximum value present in the data (11%). Defendant does not address the subs tance of this discrepancy. See Defendant’s Response to Plaintiff’s Rule 56.2 Motion for Judgment U pon the Administrative Record (“Defendant’s Response”) at 11-14; see also Ministerial Error Memo at 2-3. Defendant instead argues that “the fault lies with MTZ” for repeatedly failing to pr ovide shipment dates for exports associated with some of the DEPS licenses that MTZ had originally reported to Commerce. Id. at 12-13. MTZ’s initial submission included some licenses for which associated shipment dates were omitted. Ministerial Error Memo at 3. MTZ’s second supplemental submission omitted some previously reported licenses. Id. MTZ’s provision of additional information at verification did not fully remedy the initial omission of a ssociated shipment dates. Id. “Based on the conclusion that MTZ reported its [DEPS] licenses and cred its earned as . . . instructed, [Commerce] considered that the credits were earned based on shipments ma de during the [period of review].” Id. MTZ responds that Commerce made inconsiste nt requests for partially irrelevant data, eschewed complete data submitted by MTZ, and instead “cobbled together two other submissions which necessarily included out of period exports.” Plainti ff MTZ Polyfilms, Ltd.’s Reply to Responses Submitted by the Defendant a nd Defendant-Intervenors to Plaintiff’s Motion10 for Judgment on the Agency Record Submitted Purs uant to Rule 56.2 of the Rules of the United States Court of International Tr ade (“Plaintiff’s Repl y”) at 6-7. However, MTZ fails to support these arguments with sufficient citation to the administrative record. Accordingly, MTZ has not met its burden of demonstrating that Commerce’s factual determ inations were “unsupported by substantial evidence on the recor d.” 19 U.S.C. § 1516a(b)(1)(B)(i). It is unclear whether MTZ also contends that Commerce’s determinations were “otherwise not in acco rdance with law.” Id. Commerce “will consider the entire amount of an [import duty exemption] to confer a benefit” unless the exemption program meets certain requirements. 19 C.F.R. § 351.519(a)(4). As di scussed above, MTZ argues that Commerce in effect considers the entire amount of the DE PS duty exemption—and then some—to confer a benefit. But only Defendant cites an d discusses 19 C.F.R. § 351.519(a)(4). See Defendant’s Response at 19-20; Plain tiff’s Motion at 10-13; Pl aintiff’s Reply at 3-8. Accordingly, MTZ has also not met its burden of demonstrating that Co mmerce’s determinations were “otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
B Commerce Properly Calculated The Benefit Co nferred By The Export Promotion Capital Goods Scheme The Export Promotion Capital Goods Scheme (“EPCGS”) permits exporters to pay lower duties on imported capital equipmen t contingent upon their exportation of “four to five times the value of the capital goods within a period of eight years.” Fi nal Decision Memo at 9. If this export requirement is met, the Government of India formally waives the duties that would otherwise have been owed. Id. If it is not, then th e exporter is required to pay “all or part of the duty reduction, depending on the exte nt of the export shortfall, plus penalty interest.” Id.11 Commerce treats the subsidy as two distinct benefits: an interest-free loan in the amount of the unpaid duties and a grant when the duties are officially waived. Id. MTZ challenges four aspects of Commerce’s calc ulation of the benefits it received under the EPCGS. First, MTZ argues that Commerce should not have treated its unpaid import duties as a contingent liability loan. Second, MTZ argues that Commerce should have adjusted the EPCGS benefit to reflect what it characterizes as its “partial fulfillment” or “refixing” of its export obligation. Third, MTZ argues that the in terest rate used in the EPCGS calculation is excessive. Fourth, MTZ argues that Commerce did not properly attribute all of the EPCGS benefit to MTZ’s sales. According to MTZ, “[t]hese errors . . . are contrary to the facts of record and cannot stand.” Plaintiff’s Motion at 13. Some of these arguments, however, are more properly characterized as legal, rather than f actual, challenges. As Defendant properly points out, “MTZ does not cite a single st atute, regulation, or decision of this or any other court in the 16 pages it devotes to this program. ” Defendant’s Response at 14 (emphasis added).
1 Commerce’s Decision To Treat MTZ’s Unpaid Import Duties As A Contingent Liability Loan Is In Accordance With Law MTZ asserts that because “the duty savings [realized under the EPCGS] are not carried in the books and records of MTZ as a long term lo an, but rather are treated as earned, it is inappropriate for [Commerce] to treat them as a long term loan.” Plaintiff’s Motion at 14-15. MTZ proposes that Commerce should, instead, calc ulate the benefit to reflect the manner in which MTZ depreciates the assets it purchased with the benefit conferred by the EPCGS. Id. at 14. MTZ’s proposed methodology is not “relevant to” and “doe s not comport with” how the EPCGS benefits are treated pur suant to Commerce’s regulations . Final Decision Memo at 26.12 The deferral of indirect taxes provides a benef it that is “treated as a government-provided loan in the amount of the tax deferred, accord ing to the methodology described in [19 C.F.R. ' 351.505].” Indirect Taxes and Import Charges (Other than Export Programs) , 19 C.F.R. ' 351.510(a)(2). When “the repayment obligation is contingent upon the company taking some future action or achieving some goal in fulfillment of the loan’s requirements,” Commerce is normally required to treat the impor t duty deferrals as contingent li ability loans until the liability is met or until the event upon which repayment depends is no longer a viable contingency.
Loans , 19 C.F.R. ' 351.505(d). According to Commerce, one of the benef its “provided under the ECPGS is the amount of unpaid import duties that would have to be paid to the [Government of India] if the accompanying export obligations are not met.” Fina l Decision Memo at 9. Consistent with 19
C.F.R. ' 351.505(d), Commerce treated these unpaid impor t duties as an interest-free contingent liability loan and indicated that it will continue to do so until the export obligation is fulfilled and the contingent obligation no longer exists. See id. at 26. Thus, Commerce’s treatment of MTZ’s unpaid im port duties is in accordance with law.
2 Commerce’s Determination That The Export Obligation Was Not Fu lfilled Until Final Action Was Taken By The Government of India Was Supported By Substantial Evidence When an export obligation is satisfied and th e foreign government officially waives the unpaid import duties, Commerce considers th e contingent liabili ty extinguished and, accordingly, treats the waiver of the unpaid duties as a grant. See 19 C.F.R. § 351.505(d)(2); Final Decision Memo at 26. MTZ contends that Commerce should pa rtially convert the contingent liability from an inte rest-free loan to a grant to refl ect what it characterizes as its “partial fulfillment” or “re-fixing” of its e xport obligation. Plainti ff’s Motion at 15-23. In13 support of this proposition, MTZ cites to the following statement made by Commerce during the course of the initial investigation: If we examine this program again in a subsequent proceeding, and respondent companies submit such official documentation certifying that they have met partial export obligations under the EPCGS, we will examine at that point whether such documentation is certification that a company has legally discharged part of its export obliga tions under the EPCGS, and whether [Commerce] should treat the corresponding pa rt of a company’s unpaid Customs duties under the EPCGS as a grant pursuant to 19 C.F.R. § 351.505(d)(2). Plaintiff’s Motion at 15 (quoting Issues a nd Decision Memorandum accompanying Notice of Final Affirmative Countervailing Duty Determina tion: Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From India , 67 Fed. Reg. 34,905 (May 16, 2002) (“Initial Investigation Decision Memo”) at cmt. 5) (empha sis added in Plaintiff’s Motion). MTZ does not appear to chal lenge Commerce’s statement that it requires “official documentation” from the Government of India before it will convert a porti on of an interest-free loan to a grant in accordance with 19 C.F.R. ' 351.505(d)(2). Rather, MTZ asks the court to reweigh the record evidence and find that it did supply Commerce with the official documentation required. According to MTZ, duri ng the course of the administrative review, MTZ provided letters to Commerce in an attempt to establish that it had partially satisfied the export obligation and that the export obligation had been refixed. See Response of MTZ to Countervailing Duty Fourth Supplemental Questionnaire, Ex. SSSS-4(c), C.R. 18. Commerce examined the record evidence. See Final Decision Memo at 28 (citing MTZ’s First Supplemental Response at Exhibit S-12 (April 18, 2007), and MTZ’s Fourth Supplemental Response at Exhibit SSSS-4(c) (August 23, 2007)). Commerce’s review of the referenced documents revealed that the Government of Indi a “can revise the terms of the original export obligation at any time.” Id. Commerce took the position that b ecause it “cannot reliably measure14 the true value of the export oblig ation at a point in time,” it would continue to rely “on only those official certifications that exti nguish the export obligation, in fu ll.” Final Decision Memo at 29. According to Commerce, because the documents submitted by MTZ did not specify that the import duties were officially waived, Commerce would “continue to calculate the benefit as contingent liability loans at the full value of th e original duties owed ag ainst that license.” Id. This determination was suppor ted by substantial evidence. 3 Commerce Properly Selected The Interest Rate Used To Calculate The Benefit Conferred By The ECPGS Commerce’s treatment of MTZ’s unpaid duties is consistent with th e applicable statute and regulations. The applicable statute, 19 U.S.C. § 1677(5)(E), provides that a benefit exists “in the case of a loan[] if there is a difference betw een the amount the recipient pays on the loan and the amount the recipient would pay on a comparable commercial loan that the recipient could actually obtain on the market.” 19 U.S.C. § 1677(5)(E); see also 19 C.F.R. § 351.505(a). The regulation, 19 C.F.R. § 351.505(d), de fines a contingent liability intere st-free loan as an interestfree loan for which “the repayment obligation is contingent upon the company taking some future action or achieving some goal in fulfillment of the loan’s requirements.” 19 C.F.R. § 351.505(d). In addition, the regulati on provides that a long-term benchmark is to be used to measure the benefit when “the event upon which re payment of the loan depends will occur at a point in time more than one year after the re ceipt of the contingent liability loan.” Id. Commerce calculates the benefit by using an in terest rate from a comparable long-term loan that was “established during, or immediately before, the year” when the contingent liability arose. 19 C.F.R. § 351.505(a)(2)(ii i). Where there is no comparable long-term loan, Commerce15 is authorized to rely upon national average intere st rates to calculate th e benefit. 19 C.F.R. § 351.505(a)(3)(ii). Here, Commerce used a long-term interest rate benchmark because the ECPGS export window closes eight years after importation of the capital good. Final Decision Memo at 11-12. Because MTZ did not have a comparable long-term rupee-denominated loan from a commercial bank that was established dur ing, or immediately before, th e year under consideration, Commerce relied upon national average interest rate s as reflected in sta tistics generated by the International Monetary Fund. Preliminary Results , 72 Fed. Reg. at 43,609. Commerce’s calculations are thus consistent with the applicable statute and regulations. MTZ asserts that Commerce should modify its methodology to reflect MTZ’s accounting practices with respect to the goods that MTZ pur chased through the EPCGS. Plaintiff’s Motion at 14-15. MTZ additionally asserts that Commerce must utilize a “commercial reality” test. Plaintiff’s Motion at 25. Under this proposed test, Commerce must, first, “assume that any rational company would ‘pay off’ the loan at no less than the rate of depreciation of the underlying asset” and, second, adjust the rate to reflect market fluctuations. Id. at 25-26. Commerce’s methodology, however, is presumpt ively correct. Thai Pineapple v. United
States , 187 F.3d 1362, 1365 (Fed. Cir. 1999) (citati ons omitted). Indeed, Commerce’s “interpretation governs in the absence of unamb iguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.” United States v. Eurodif S.A. , 129 S. Ct. 878, 886 (2009) (citing Chevron , 467 U.S. at 844). To prevai l on its arguments, MTZ would have to demonstrate that Commerce’s methodol ogy is not a reasonable interpretation of the
statute. See Chevron , 467 U.S. at 844. It has not.16 4 Commerce Properly Attributed All Of The ECPGS Benefit To MTZ’s Export Sales Commerce attributed all of th e benefit from the ECPGS program to MTZ’s total exports because it determined that the program is not ti ed to subject merchandise. Final Decision Memo at 10. MTZ first contests Commer ce’s decision to attribute the be nefit only to its export sales. Plaintiff’s Motion at 26-27. According to MTZ, the machinery can also be used to produce goods that it sells in its domestic market. Id. MTZ also contests Commerce’s decision to attribute to its exports of subject merchandi se (PET film) the ECPGS benefit received for purchase of the machinery used to manufacture PET chips. Id. at 27-29. MTZ provides no legal authority to support its contentions. See id. at 26-29. MTZ’s first contention—that Commerce incorrec tly attributed the ECPGS benefit only to its export sales—does not reflec t the applicable legal framewor k. Commerce’s first step in determining how to attribute th e benefit of a subsidy is to determine the type of subsidy bestowed. If a subsidy is “contingent upon export performance,” it is properly treated as an export subsidy. 19 U.S.C. § 1677( 5A)(B); Export Subsidies , 19 C.F.R. § 351.514(a). Commerce’s next step is to divide the benefits received from the subsidy by the relevant sales. Commerce will “attribute an export subsidy only to products exported by that firm.” Calculation of Ad Valorem Subsidy Rate and At tribution of Subsidy to a Product , 19 C.F.R. § 351.525(b). Here, Commerce found that the EPCGS “is contingent upon export” and, accordingly, determined that it was an export subsidy. Preliminary Results , 72 Fed. Reg. at 43,612. After making this determination, Commerce then attributed the benefit only to MTZ’s export sales. Id. at 43,613. MTZ’s argument that Commerce should have consider ed its domestic sales is contrary to the statute and the corresponding regula tions. As Defendant notes, “MTZ’s use of its17 machinery to produce goods for domestic sale does not negate the fact that the [Government of India’s] waiver of these duties is contingent upon MTZ’s export of a certain amount of goods.” Defendant’s Response at 24. Similarly, MTZ’s second contention—that Co mmerce should not have attributed to its exports of subject merchandise (PET film) th e ECPGS benefit received for purchase of the machinery used to manufacture PET chips—fails to reflect the applicable legal framework. The relevant regulation, 19 C.F.R. § 351.525(b)(5)(i), provides that if a “subsidy is tied to the production or sale of a particul ar product” Commerce will “attr ibute the subsidy only to that product.” 19 C.F.R. § 351.525(b)(5)(i). Commerce looks only to “the stated purpose of the subsidy . . . at the time of bestowal .” Countervailing Duties: Final Rule , 63 Fed. Reg. 65,348, 65,403; Royal Thai Government v. United States , 441 F. Supp. 2d 1350, 1363-64 (CIT 2006). As long as the subject merchandise could be produc ed, it is immaterial whether and how such subject merchandise is actually produced. See Fabrique de Fer de Charleroi v. United States , 166 F. Supp. 2d 593, 601-04 (CIT 2001). Commerce states that it countervailed the bene fit received from importing “two separate types of capital equipment that can be used to produce both PET chips and PET film,” because such equipment could be used to produce s ubject merchandise or an input for subject merchandise. Final Decision Memo at 32. This is consistent with the legal framework within which Commerce must make its determinati on, as described in th e preceding paragraph. Accordingly, Commerce’s calculation of the ECPGS benefit is supported by substantial evidence and in accordance with law.18 C Commerce Properly Found That Th e Advance License Program Is A Countervailable Subsidy MTZ argues that Commerce’s determination that certain exempted import charges that were waived under the Advance License Progr am (“ALP”) were countervailable is “not grounded in fact.” Plaintiff’s Mo tion at 30. MTZ does not cite a ny legal authority in support of its argument but, rather, asks the court to reweigh the record evidence. See id. at 29-30. In accordance with 19 CFR § 351.519(a)(4)(i), Commerce examined whether the Government of India had a reasonable “syste m or procedure to confirm which inputs are consumed in the production of the exported products and in what amounts” that is “effective for the purposes intended[] and is based on generally accepted commercial practices in the country of export.” 19 CFR § 351.519(a)(4)(i). Commerce found that the Government of India did not have such a system in place. Final Decision Me mo at 7-8, 22. After reviewing the record evidence, Commerce determined that the Gove rnment of India was not able to provide calculations that took into account the pr oduction of the PET film industry. Id. at 22. Commerce also determined that there wa s a lack of evidence regardi ng the Government of India’s assessment of penalties on companies that either did not meet the export requirements established by the ALP or that claimed excessive credits. Id. Moreover, Commerce found that “no allowance was made by the [Government of I ndia] to account for wast e to ensure that the amount of duty deferred would not exceed the amount of import charges on imported inputs....” Id. MTZ essentially argues that Commerce should accord deference to the Government of India’s view that its procedures are adequate based on “principle s of comity.” Plaintiff’s Motion at 30. MTZ fails to cite legal authority for this position. More importantly, MTZ’s position19 would render 19 C.F.R. § 351.519(a)(4) irrelevant; if Commerce were under some sort of duty to accept a foreign government’s view regarding the adequacy of that government’s procedure, there would never be a need for Commerce to make an independent assessment, as it is required to do by the regulation. Commerce also examined, in accordance with 19 C.F.R. § 351.519(1)(4)(ii), whether the Government of India “has carried out an examin ation of actual inputs involved to confirm which inputs are consumed in the production of the e xported product, and in what amounts.” 19 C.F.R. § 351.519(1)(4)(ii). Commerce fou nd that the Government of I ndia did not actually perform such an examination because it did not review a ll SIONs that were used in the PET film industry. Final Decision Memo at 23. MTZ has not met its burden of demonstr ating that Commerce’ s findings are not supported by substantial evidence.
D Commerce Properly Determined That The Governme nt of India’s Decision To Not Impose The Central Sales Tax In Union Terri tories Is Geographically Specific MTZ contests Commerce’s determination that the Government of India’s exemption of firms in the Union Territories 2 from collecting the Central Sales Tax (“CST”) was geographically specific and provi ded a benefit to MTZ in an am ount equal to the tax that MTZ would otherwise have owed. Plaintiff’s Motion at 31. MTZ alternatively cont ends that it did not receive a benefit because its s uppliers raised its prices. Id. at 32. MTZ does not cite any legal authority in support of these contentions. See id. at 31-32.

2 “The Republic of India is composed of ... 28 States and seven centrally administered Union Territories.” The Statesman’s Yearbook 2010: The Politics, Cultures and Economies of the World 614 (Barry Turner ed., 2009); see also Government of India Verification Report, P.R. 117, at 10.20 The Central Sales Tax “is levied on intra-state sales and is controlled and regulated by the [Government of India].” Government of I ndia Verification Report, P.R. 117, at 10. The Government of India exempted companies within Union Territories from collecting the CST. Final Decision Memo at 34-35. Commerce found that this exemption was “limited to an enterprise or industry located w ithin a designated geographical re gion within the jurisdiction of the authority providing the subsidy.” 19 U.S.C. § 1677(5A)(D)(iv); see Final Decision Memo at 35. It is irrelevant that MTZ’s suppliers allegedly rais ed prices, as the stat ute directs Commerce to evaluate the “benefit to the recipient.” 19 U.S. C. § 1677(5)(E). In the case of an exemption from an indirect tax such as the CST, “a benefit ex ists to the extent that the taxes . . . paid by a firm as a result of the [exemption] are less than the taxes the firm would ha ve paid in the absence of the [exemption].” 19 C.F.R. ' 351.510. Commerce accordingly dete rmined that “[t]he benefit equals the amount of sales taxes not paid by MTZ pursuant to [19 U.S.C. ' 1677(5)(E)].” Final Decision Memo at 35. Thus, Commerce’s findings with respect to the CST are supported by substantial evidence.

V CONCLUSION For the above stated reasons, Plaintiff’s Mo tion for Judgment on the Agency Record is DENIED and Commerce’s determ ination in Polyethylene Terepht halate Film, Sheet, and Strip from India: Final Results of Counter vailing Duty Administrative Review , 73 Fed. Reg. 7,708 (February 11, 2008), as amended by Amended Final Results of Countervailing Duty21 Administrative Review: Polyet hylene Terephthalate (PET) Film , Sheet, and Strip from India , 73 Fed. Reg. 15,135 (March 21, 2008), is AFFIRMED.

__/s/ Evan J. Wallach____ Evan J. Wallach, Judge

Dated: October 15, 2009 New York, New York