Slip Op. 12-69

UNITED STATES COURT OF INTERNATIONAL TRADE

FUWEI FILMS (SHANDONG) CO., LTD., Plaintiff,

v. UNITED STATES,

Defendant. Before: Leo M. Gordon, Judge

Consol. Court No. 11-00061

OPINION and ORDER [Administrative review results remanded.] Dated: June 1, 2012

David J. Craven, Riggle & Craven, of Ch icago, IL, for Plaintiffs Fuwei Films (Shandong) and Shaoxing Xiangyu Green Packing Co., Ltd. David D’Alessandris, Trial Attorney, Comm ercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With him on the brief were Tony West, Assistant A ttorney General, Jeanne E. Davidson, Director and Patricia M. McCarthy, Assistant Directo r. Of Counsel on the brief was Whitney Rolig, Office of the Chief Counsel for Import Administration, International Trade Administration, Department of Co mmerce, of Washington, D.C. Ronald I. Meltzer, Patrick J. McLain, David M. Horn, and Jeffrey I. Kessler, Wilmer, Cutler, Pickering, Hale and Door, LLP, of Washington, DC, for DefendantIntervenors DuPont Teijin Films, Mitsubish i Polyester Film, Inc., SKC, Inc., and Toray Plastics (America), Inc. Gordon, Judge: This consolidated ac tion involves an administrative review conducted by the U.S. Department of Comm erce (“Commerce”) of the antidumping duty order covering Polyethylene Terephthalate (“ PET”) Film from the People’s Republic of China. See Polyethylene Te rephthalate Film from the People’s R epublic of China,Consol. Court No. 11-00061 Page 2

76 Fed. Reg. 9,753 (Dep’t of Commerce Feb. 22, 2011) (“Final Results”) and accompanying Issues and Decision Memora ndum, A-570-924 (Feb. 14, 2011), available at http://ia.ita.doc.gov/frn/ summary/prc/2011-3909-1.pdf (las t visited June 1, 2012) (“Decision Memorandum”). Before the cour t are motions for judgment on the agency record filed by Fuwei Films (Shandong) Co ., Ltd., and Shaoxing Xi angyu Green Packing Co., Ltd. (“Green”), respondents in the administrative proceeding (collectively “Respondents”), and DuPont Teijin Films, Mits ubishi Polyester Film, Inc., SKC, Inc., and Toray Plastics (America), Inc. (collectively “DuPont”), petitioners in the administrative proceeding. The court has jurisdiction pursuant to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2 )(B)(iii) (2006), 1 and 28 U.S.C. § 1581(c) (2006). Respondents challenge Commerce’s (1) su rrogate valuation of labor inputs, (2) alleged clerical errors for Green’s packing ma terial and per-unit electricity and water, and (3) surrogate valuation of PET chips. 2 DuPont also challenges the surrogate valuation of Respondents’ PET chips. For the reasons set forth below, this matter is

remanded to Commerce.

I. Standard of Review

For administrative reviews of antidum ping duty orders, the court sustains determinations, findings, or conclusions of the U.S. Department of Commerce unless

1 Further citation to the Tariff Act of 1930, as amended, are to the rele vant provisions of Title 19 of the U.S. Code, 2006 edition.

2 PET chips are the primary raw mate rial for production of PET film.Consol. Court No. 11-00061 Page 3

they are “unsupported by subs tantial evidence on the record, or otherwise not in

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More s pecifically, when reviewing agency determinations, findings, or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp. v. United Stat es, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006). Substantial

evidence has been described as “such relev ant evidence as a reasonable mind might accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quot ing Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Subst antial evidence has also been described as “something less than the weight of the evidence, and the possibility of drawing two inconsistent

conclusions from the evidenc e does not prevent an admini strative agency's finding from being supported by substantial evidence.” Cons olo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966). Fundamentally, though, “substant ial evidence” is best understood as a word formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and Practice § 9.24[1] ( 3d. ed. 2011). Therefore, w hen addressing a substantial evidence issue raised by a party, the c ourt analyzes whether the challenged agency action “was reasonable given the circumst ances presented by the whole record.” Edward D. Re, Bernard J. Babb, and Susan M. Koplin, 8 West's Fed. Forms, National Courts § 13342 (2d ed. 2010).Consol. Court No. 11-00061 Page 4

II. Discussion A. Voluntary Remand Commerce has requested a voluntary remand to (1) address Respondents’ arguments regarding the surrogate value for the labor input, and (2) correct a clerical error in Green’s per-unit water and elec tricity costs, which the court will grant. See SKF USA Inc. v. United States , 254 F.3d 1022, 1029 (Fed. Cir. 2001). B. Green’s other Clerical Error Allegation When calculating Green’s packing material expenses for the preliminary results, Commerce included a space between a parenthes is and a slash mark in a line of computer code. Green did not raise this is sue in its case brief, nor did Green raise the issue as a clerical error submission following issuance of the Final Results. Green has

instead raised this issue for the first time in its opening brief in this action, alleging that the extra space caused an error in the conver sion (or non-conversion) of units from tons

to kilos. The extra space actually has no effect w hatsoever on the calculation. Defendant explains that the software computes each instru ction line as a whole. Def.’s Br. at 16 n. 5, Nov. 30, 2011, ECF No. 55 (quotin g SAS Institute, Inc., SAS 9.3 Language Reference: Concepts 21 (Cary, NC SAS Institute, Inc. 2011) (“A blank [space] is not

treated as a character in a SAS statement unless it is enclos ed in quotation marks . . . [t]herefore, you can put mult iple blanks any place in a SAS statement where you can put a single blank. It has no effect on the synta x.”). In its reply br ief, Green raises anConsol. Court No. 11-00061 Page 5

entirely new argument about an apparently different cler ical error affecting the converted or calculated weight of Green’s plastic caps. See Respondents’ Reply Br. at 11-12, Jan. 4, 2012, ECF No. 58-1 (“Plaintiffs initially believed that this error was

reflected in the identified inst ruction. Apparently it was not .”). The time of one’s reply brief, however, is not the opportune moment to figure out the specifics of one’s argument, and introduce a brand new theory. See Scheduling Order at 6, July 14, 2011, ECF No. 36 (“The reply brief may not introduce new arguments. ”). The court will

therefore sustain Commerce’s trea tment of Green’s packing expenses. C. Surrogate Valuation of PET Chip Inputs When valuing the factors of production in a non-market economy proceeding,

Commerce must use the “best available information” when selecting surrogate data from “one or more” surrogate market economy countries. 19 U.S.C. § 1677b(c)(1), (4). Commerce's regulations provide that surro gate values should “normally” be publicly available and from a single surrogate country . 19 C.F.R. § 351.408(c) (2008). Commerce prefers data that reflects a broad market average, is publicly available, contemporaneous with the period of review, s pecific to the input in question, and exclusive of taxes on exports. Certain Pneu matic Off–the–Road Tire s from the People's Republic of China , 73 Fed. Reg. 40,485 (Dep't of Commerce July 15, 2008) and accompanying Issues and Decision Memor andum cmt. 10 at 26, A–570–912 (July 7, 2008), available at http://ia.ita.doc.gov/fr n/summary/PRC/E8–16156–1.pdf (last visited this date).Consol. Court No. 11-00061 Page 6

“[T]he process of constructing foreign ma rket value for a producer in a nonmarket economy country [using surrogate values] is di fficult and necessarily imprecise.” Nation Ford Chem. Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999) (citation omitted) (internal quotation marks omitte d). Importantly, Commerce’s surrogate value

decision or data choice is not rendered unr easonable because an alternative inference

or conclusion could be drawn from the adminis trative record. Daewoo Elec. Co. v. Int’l Union of Elec., Elec., Tech., Salaried & Mach. Workers, 6 F.3d 1511, 1520 (Fed. Cir. 1993). Rather, the court will upset Comme rce’s surrogate valuation only if no

“reasonable mind could conclude that Commerce chose the best available information.” Zhejiang DunAn Hetian Metal Co. v. Unit ed States, 652 F.3d 1333, 1341 (Fed. Cir. 2011) (quoting Goldlink Indus. Co. v. United States, 30 CIT 616, 619, 431 F. Supp. 2d 1323, 1327 (2006)) (internal quotation marks omitted). In determining the “best available informa tion” to value Respondents’ PET film inputs of bright polyester and master batch (“BP&MB”) PET chips, Commerce needed to determine which provision of the Harm onized Tariff Schedule (“HTS”) of India (the primary surrogate country) best applied to Re spondents’ BP&MB chips. This was an involved undertaking: When selecting surrogate values with which to value the FOPs used to produce subject merchandise, the Departm ent is directed to use the “best available information” on the record. S ee Section 773(c)(1) of the Act. As noted by Petitioners, when selecting surrogate values for use in an NME proceeding, the Department’s preference is to us e, where possible, a range of publicly available, non-expor t, tax-exclusive, and product-specific prices for the POR, with each of these factors applied non-hi erarchically to the particular case-specific facts and with preference to data from a singleConsol. Court No. 11-00061 Page 7

surrogate country. In the Preliminary Results, th e Department selected a surrogate value based on an eight-digit basket category that was the most specific on record to the input in question. The Department valued PET chips with HTS 3907.60.20, “Polyethyl ene Terephthalate With Intrinsic Viscosity >= 0.64 Dl/G & <=0.72 Dl/G,” the HTS subheading applicable to Respondents’ FOPs for PET chips with t he intrinsic viscosity meeting this description. However, the Department has reviewed the a dditional factual information placed on the record by Respondents regarding the methodologies employed for measuring in trinsic viscosity and, after further review of the certificates of anal ysis submitted by Respondents, the Department has determined that ther e is insufficient evidence on the record to support the selection of HTS 3907.60.20 as the only surrogate value for the inputs that comprise all, or nearly all, of Respondents’ direct materials, and the great majority of Respondents’ cost of manufacturing. Therefore, for the final results, th e Department has determined to use the GTA Indian import data under bot h HTS subheadings 3907.60.10 and 3907.60.20. Data for both subheadings are publicly available, broad market averages, contemporaneous with the POR, tax-exclusive, and representative of signific ant quantities of imports, thus satisfying critical elements of the Department ’s surrogate value test. Respondents have argued that the cu stoms service of the Indian government uses a different testing methodology for calculating intrinsic viscosity than those used by Respondents in their questionnaire responses. Information on the record regarding testing methods in India, i.e., a letter from an Indian customs official secured by Respondents’ counsel during the less than fair value investigation, indicates that to correctly classify merchandise enter ing India, importers should have intrinsic viscosity details for thei r product(s) based on ASTM standards. The letter, dated April 7, 2008, was wr itten only six months prior to the beginning of the POR. Further, Respondents have also submitted information regarding intrinsic viscosity testing methods commonly used in the PRC, which are testing methods c onforming to those set forth by ISO, but which are not the same as the ASTM testing protocol for measuring PET chip intrinsic viscosity used in India. Finally, the Department has reviewed the submission of the Du Pont Group, respondents in the investigation, which Res pondents submitted to the record of this review subsequent to the Preliminary Results. In the investigation, the DuPont Group submitted to the public record a list of its suppliers, the PET chips that it purchased from each supplier, t he PET chip intrinsic viscosity by the suppliers’ specification and, finally, conv ersions of these intrinsic viscosity values to demonstrate what the val ues would be using other testingConsol. Court No. 11-00061 Page 8

methods. Thus, Respondents’ submitted factual information indicates that there are several different testing methods for measuring the intrinsic viscosity of PET chips, which differ based upon the nature and proportion of solvents used in the testing process. The actual testing method used to measure the intrinsic viscosity of PET chips is done at the discretion of the tester. Depending upon the testing met hod used, the intrinsic viscosity of PET chips could be measured eit her above or bel ow the 0.64 Dl/G threshold which defines HTS 3907.60.20. The record evidence in this review supports the Department’s use of HTS 3907.60.20 as we concluded in our Pre liminary Results. Nevertheless, we reviewed again the certificates of analysis that Respondents submitted to the record prior to the Preliminary Re sults, and it appears from the record that the testing method used by Res pondents’ suppliers to provide the intrinsic viscosity values reported on the certificates is not disclosed. Further, the certificates of analysis for Respondents’ PET chips indicates that at least some of Respondents’ PET chips have an intrinsic viscosity very near the 0.64 Dl/G threshold wh ich defines the upper limit of HTS 3907.60.10, and the lower limit of HTS 3907.60.20. Due to the absence of record evidence that would provi de the Department with information for determining the correct intrinsic vi scosity and the most accurate HTS subheading, the Department believes that some of Respondents’ PET chips match the description for HTS 3907.60.10. Moreover, as the bright polyester chip FOP and ma ster batch chip FOP make up the vast majority of the cost of manufacturing for Responden ts, it is critical in this instance that the Department applies a comprehensive valu ation for the inputs at issue. Respondents and Bemis have noted va rious PET chip quantity and value examples on the record for other India HTS s ubheadings, and argued that the quantity in the surrogate value used in the Preliminar y Results (i.e., HTS 3907.60.20) is lower when co mpared to these examples. In particular, Respondents have contra sted the quantity of HTS 3907.60.20 with the greater merchandise quantit y of HTS 3907.60.10, the HTS subheading used to value Du Pont Group’s PET chip i nput in the original investigation. Respondents have present ed information showing that the adjacent HTS 3607.60.10 represents a more re liable quantity than the Indian HTS 3907.60.20. Generally, the Department’s practice has found that the existence of lower commercia l quantities and higher prices alone does not necessarily indicate t hat price data are distorted or misrepresented and, thus, are not suffi cient to exclude particular surrogate values absent specific evidence that the values are otherwise aberrational.Consol. Court No. 11-00061 Page 9

Moreover, as stated in the preceding paragraph, the Department has determined to apply an equal balance of all surrogate values that are, or could potentially be applicable to, Re spondents’ PET chips. Therefore, due to: (1) the reasonable likelihood t hat Indian HTS 3907.60.10 may be applicable, at least in part, to Res pondents’ inputs; and (2) the magnitude of the surrogate value in relation to Respondents’ cost of production, the Department has applied the simple-ave rage of the two weighted-average unit values of Indian HTS sub headings 3907.60.10 and 3907.60.20 to calculate the surrogate val ues for bright polyester chips and master batch chips in order to calculate as accurately as possible Respondents’ antidumping margins for the final re sults. The information on the record supports a finding that both HTS subhead ings may be equally applicable to Respondents’ inputs. The Department has applied the simple-average of the two weighted-average unit val ues of the Indian HTS subheadings 3907.60.10 and 3907.60.20, and not a weighted-average unit value of all merchandise under these HTS subheadings, to avoid an imbalanced result due to the greater merc handise quantity of HTS 3907.60.10. Finally, Respondents have submitted Infodrive India data as a corroborative tool to show that the GTA surrogate value dat a are distorted. Due to the Department’s well-establis hed reservations regarding the use of Infodrive data, either as a corr oborative tool or price benchmark, the viability of this particula r Infodrive dataset (and, thus, Respondents’ claims that the GTA data are distorted) must be anal yzed in accordance with Department practice and po licy regarding the use of Infodrive data. The Department has stated that it will consider Inf odrive data to further evaluate import data, provided: (1) ther e is direct and substantial evidence from Infodrive reflecting the imports from a particular country; (2) a significant portion of the overall im ports under the relevant HTS category is represented by the Infodrive Indi a data; and (3) distortions of the surrogate value in question can be dem onstrated by the In fodrive data; but that the Department will not use Infodr ive data when they do not account for a significant portion of the impor ts which fall under a particular HTS subheading. On point (1), all countries but one that are reported in GTA for HTS 3907.60.10 are reported in the Infodrive data, and t he Infodrive data for HTS 3907.60.20 do indicate shipments fr om Germany to India as shown in GTA. Regarding point (2), we fi nd that the Infodrive India is underinclusive, representing only 48.44 percent of POR value and 53.05 percent of POR quantity for In dian HTS 3907.60.10, and only 79.16 percent of POR value and 84.72 perc ent of POR quantit y for Indian HTSConsol. Court No. 11-00061 Page 10

3907.60.20, as reported in t he official source. Over half of the value in HTS 3907.60.10, and one-fifth of the value in HTS 3907.60.20, based on official Indian import statistics is not accounted for by the Infodrive. Information in this unaccounted for portion of the actual entries may contradict the claim that these HT S numbers produce a distortive average value. In numerous cases, the D epartment has rejected Infodrive data because they did not account for a signifi cant portion of the overall official import data. If the Departm ent considers that Infodr ive information is not conclusive regarding the validity of the surrogate value based on HTS 3907.60.10 and HTS 3907.60.20 , the Department may continue to apply the surrogate value. As to point (3), Respondents and Bemis have not provided any benchmarks to show that the AUVs are abnormally high or the quantity is abnormally low. Furt hermore, Infodrive India data are collected by a private party that only reviews bills of lading for commercial descriptions. The data in Infodrive may differ from the actual entries of the shipments as recorded in the I ndian official import statistics. In sum, the Department has appli ed the simple average of the two weighted-average unit values of the Indian HTS subhe adings 3907.60.10 and 3907.60.20 to calculate the surrogate values for bright polyester chips and master batch chips for the final results. Further, Respondents’ submitted Infodrive Indi a data are not a reliable basis for the Department to abandon the surrogate value calcul ated by the Department in the Preliminary Results, as doing so would require a speculative interpretation of the data, and also because the dat a are an under-inclusive portion of the officially reported Indian import data. Therefore, because there is insufficient evidence that Indian HTS 3907.60.20 should be used exclusively for valuing Respondents’ PET chips, as mentioned above for the final results, we will value Res pondents’ PET chip inputs using Indian import statistics HTS subhead ings 3907.60.10 and 3907.60.20. Because the Department has not departed from its se lection of India as the surrogate country and has maintained the application of the selected surrogate value from India for PET chip s in this AR, the Department need not address Respondents’ arguments against the app lication of surrogate values from Thailand, and surrogate va lues from other potential surrogate countries that may or may not have been properly translated. Decision Memorandum at 12- 16 (footnotes omitted). Both Respondents and DuPont challenge Commerce’s surrogate valuation of Respondent’s PET chips as the “best available information,” 19 U.S.C. § 1677b(c)(1).Consol. Court No. 11-00061 Page 11

DuPont argues that the administrative re cord supports HTS 3907.60.20 as the one, true, correct data source fo r Respondents’ PET chips, wh ile Respondents argue that HTS 3907.60.10 is the one, true, correct data source. During the review Respondents submitted test certificates from their suppliers that showed intrinsic viscosities (“IVs”) between 0.64 and 0.72 dl/g, placing them squarely under HTS 3907. 60.20 if the testing method (I SO or ASTM) is ignored. The certificates did not identify the testing method used to calc ulate the IVs. Respondents addressed this problem indirectly by relying on submissions from the investigation that had been provided by the “DuPont Group,” which consisted of the participating mandatory respondent, DuPont Teijin Films Chin a Limited, together with DuPont Teijin Hongji Films Ningbo Co., Ltd., and DuPont-H ongji Films Foshan Co., Ltd.—all apparent affiliates of the petitioner here, DuPont Teijin Films. In the investigation the DuPont Group argued, and Commerce agreed, that the correct surrogate value measure was 3907.60.10, not 3907.60.20. Issues and Decision Memora ndum for Final Determination of Sales at Less than Fair Value: Poly ethylene Terephthalate Film, Sheet, and Strip from the People’s Republic of China at 2-3, A-570-924 (Sept . 17, 2008), available at http://ia.ita.doc.gov/frn/summary/prc/E8-22454-1.pdf (last visited this date). The DuPont Group (1) explained and documented that IS O tests produce higher IVs than ASTM tests, and (2) submitted detailed charts re calculating the DuPont Group’s IVs under ASTM standards. Commerce, though, did not addr ess these submissions, relying on

different reasons to favor HTS 3907.60.10 over 3907.60.20 (im port statistics forConsol. Court No. 11-00061 Page 12

3907.60.20 contained an insignifi cant quantity of imports not representative of the DuPont Group’s PET chip purchase volume or consumption experience) . Id. With this background in mind, the court first addre sses DuPont’s arguments, then Respondents’. 1. DuPont’s Arguments At the outset, the court mu st note that DuPont has assumed a somewhat difficult position by arguing that HT S 3907.60.20 constitutes the only proper dataset (for Respondents PET Chips) shortly after t he DuPont Group successfully argued in the investigation that HTS 3907.60.10 is the only proper datase t (for the DuPont Group’s PET chips). Here the main thrust of DuP ont’s argument is that Commerce’s decision to include HTS 3907.60.10 in its surrogate valuation is conjectural. See DuPont Br. at 5-8, ECF No. 46-2. “Conjecture” though is not r eally a word that springs to mind after reading Commerce’s detailed an alysis quoted above, which d oes not appear to be the product of mere guesswork. DuPont’s cont ention is also a surprising, if unfair, characterization given the position the DuPo nt Group assumed in the investigation. DuPont argues that Commerce’s conclusi on that the ISO standa rd is “commonly” used in China (and by extensi on, Respondents) is conjectu re. DuPont Br. at 5-7. DuPont builds its argument fr om a cherry-picked statement in China Nat'l Machinery Import & Export Corp. v. United States, 27 CIT 255, 268, 264 F. Supp. 2d 1229, 1240 (2003) ("CMC I"), “Conjectu res are not facts and cannot constitute substantial evidence." DuPont, however, neglects to ci te or discuss the s ubsequent history of CMC I, in which Commerce maintained its original position on remand, Court No. 01-Consol. Court No. 11-00061 Page 13

01114, May 16, 2003, ECF No. 40, which t he court then sustained as reasonable despite its earlier (and ultimately unfounded) concerns about potent ial “conjecture.” See China Nat'l Machinery Impor t & Export Corp. v. United States, 27 CIT 1553, 293 F. Supp. 2d 1334 (2003), aff’d without opinion, 104 Fed. Appx. 183 (Fed. Cir. 2004). CMC I, therefore, has limited persuasiv e value given its subsequent history. Here, the question is not whether Commerc e engaged in “conjecture” that fails to qualify as “substantial evidence,” or that Commerce predicated its decision on mere “suspicion,” DuPont Br. at 5- 8, (characterizations that are hard to justify given Commerce’s detailed analysis above as well as the results of the investigation), but simply whether Commerce’s findings and conclusions supporting its ultimate

determination to use data from HT S 3907.60.10 are reasonable given the circumstances presented by the record. DuPont argues that Commerce’s conclusion that Chinese producers “commonly” use the ISO standard is unreasonable because the

administrative record did not contain direct evidence that the ISO standard is universally used in China. DuPont’s insistence upon di rect evidence is an unusual stance in a proceeding in which Commerce determines “surr ogate” values that substitute for the direct evidence of a respondent ’s own accounting. It is all the more curious because the statute does not require, nor have the courts imposed, a requirement of evidentiary exactitude for Commerce’s surrogate valuations. If framed in absolutes, DuPont is correct that the administrative record does not establish that everyone in China always uses the ISO standard. The record also doesConsol. Court No. 11-00061 Page 14

not establish that the ISO standard is neve r used in China. Judicial review of Commerce’s action here does not depend on absolutes like always or never, but instead on whether Commerce’s inference about Respondents’ ISO utilization is reasonable given the information on the administ rative record. It is. As Defendant explains, any lack of document ation explicitly linking Res pondents’ inputs to the ISO testing method is balanced by the DuPont Group information from the investigation 3 demonstrating that Chinese PET chip pr oducers generally use the ISO method, and have done so for the models of PET chip that Respondents consumed. Decision

Memorandum at 13.

DuPont also relies on Peer Beari ng Company-Changshan v. United States, 35 CIT ___, ___, 752 F. Supp. 2d 1353, 1369-71 (2011) to ar gue that if Commerce was uncertain about which Indian HTS subheading to apply, it was obligated to explain why that data was superior to T hai surrogate value data. P eer Bearing, though, is not applicable here. In Peer B earing the court determined Commerce’s preference for using data from a single country unreas onable when the data was demonstrably aberrational as compared to certain benchmar k prices, and alternative data sources could be better corroborated. The issue here focuses on which HTS category is most appropriate, not whether the va lues reported for the HTS ca tegories are aberrational. For the foregoing reasons the court believes DuPont’s arguments regarding

3 Respondents submitted the in formation from the investigat ion on the record of the administrative review.Consol. Court No. 11-00061 Page 15

Commerce’s surrogate valuation of Res pondents PET chips lack merit. Given the information on the administrative record, it was reasonable for Commerce to include

data from HTS 3907.60.10 in its surrogate valuation of Respondents’ PET chips. The question remains, though, whether a reas onable mind would conclude on this

administrative record that data from HTS 3 907.60.10, and that prov ision alone, is the best available information to value Respondent s’ PET chips, or, if not, whether a

reasonable mind would conclude that Comme rce’s simple average of the two HTS provisions constitutes the best available information. 2. Respondents Arguments Respondents contend that Commerce’s use of uncon verted IV levels from China for Indian HTS subheadings is unreasonable (unsupported by substantial evidence), as is Commerce’s use of an un-weighted (simple) average of Indian HTS 3907.60.10 and Indian HTS 3907.60.20 as the basis for the surrogate value. Commerce ultimately

determined that a “broade r” straddling of import dat a for HTS 3907.60.10 and HTS

3907.60.20 is the best available information of Respondents’ PET chip value, and that reliance upon the data for only one or the other HTS provisions, or a weighted average of both, is not a better surrogat e. The court has identified th ree specific infirmities that challenge the reasonableness of Commerce’s determination, each of which requires further explanation or reconsideration by Commerce. First, Respondents relied on a summary char t prepared by the Du Pont Group in the investigation covering the ISO-to-ASTM conversions of the models of PET chipsConsol. Court No. 11-00061 Page 16

Respondents purchased from cert ain of the listed suppliers. See, e.g., Respondents’ Br. at 8-9 (citing PD 137 at Ex. PSV-8, Ex. 6-H (frm 468) and 6-I (frms 470-71)). Considering the record and the arguments, Commerce agr eed that Respondents had provided additional information showing t hat “HTS 3607.60.10 represents a more reliable quantity than the Indian HTS 3907.60.20” and Co mmerce found a “reasonable

likelihood” that Indian HTS 3907.6010 may apply to “some” of Respondents’ PET chips.

Decision Memorandum at 13-14. This requires amplification.

Commerce’s statement could be construed as a distinction between Respondents’ BP&MB and PETG chip model purchases, but the test report for the latter

shows an IV level far in excess of even the upper limit of HTS 3907. 60.20, implying that HTS 3907.60.90 (without regard to the product’s IV leve l) would be the correct

classification for that model. Commerce’ s stated focus for purposes of valuing Respondents’ factors of producti on, of course, is the IV levels of Respondents’ BP&MB chips. Each of the test reports for the BP&M B chips declares a single IV level, without indication of uncertainty or standard deviation. If one accepts the lo gic that the proper classification of Respondents’ BP&MB chips in India requires conversion from ISO (China) to ASTM (India), then why are only “some” and not all of those chips

considered within HTS 3907.60. 10? And why does that logi c also not undermine the reasonableness of any continued reliance upon the “stated” facial declarations of the IV levels on the BP&MB chip test reports? The second matter requiring clarificati on is Commerce’s consideration of theConsol. Court No. 11-00061 Page 17

record data for HTS 3907.60.20, and specifica lly Commerce’s finding on the unreliability

of Infodrive data to corroborat e that data. As a matter of practice, Commerce may

consider Infodrive data as a corroborative tool when (1) ther e is direct and substantial evidence from Infodrive reflecting the imports from a particular country; (2) a significant portion of the overall imports under the relevant HTS category is represented by the Infodrive data; and (3) dist ortions of the surrogate value in question can be demonstrated by the Infodrive data. Decision Memorandum at 15 (citing Lightweight Thermal Paper from the Peopl e’s Republic of China, 73 Fed. Reg. 57,329 (Dep’t of Commerce Oct. 2, 2008) (final LTFV det ermination) and accompanying Issues and Decision Memorandum at cmt. 9, A- 570-920 (Sept. 25, 2008), available at http://ia.ita.doc.gov/frn/summary/prc/E8-23271-1.pdf (last visited this date)). Applying that framework here, Commerc e concluded that the Infodr ive data satisfied the first prong, but not the sec ond. Commerce, therefore, decli ned to consider the Infodrive

data. Decision Memorandum at 16. More specifically, Commerce found the Infodrive

data for HTS 3907.60.10 under-inclusive as it represented only 48.44 percent of period of review by value and 53.05 percent of peri od of review by quantity as compared with GTA data. This finding was reasonable under Commerce’s framework. However, Commerce’s finding that the Infodrive data for HTS 3907.60.20 could also not be used as a corroborative tool requires fu rther clarification for two reasons. First, Commerce concluded the data unde r-inclusive because they represented “only” 79.16 percent by val ue and 84.72 percent by quantity for HTS 3907.60.20. Id. atConsol. Court No. 11-00061 Page 18

15. As support, Commerce ci ted Lightweight Thermal Paper . In Lightweight Thermal Paper, however, Commerce accepted Infodrive data that represented 88 percent of the quantity of country-specific impor ts. Why does Commerce cons ider import quantity data covering slightly less than 85 percent unreliable, but 88 percent reliable? Second, Respondents explained that (1 ) all of the Infodrive data for HTS 3907.60.20 for this period of review c onsisted of non-PET product exported from Germany (Respondents’ Br. at 12 -13), (2) there is no evidence in the record of what product the “missing” data pertained to (15. 28 percent by quantit y), (3) the quantity represented by the “missing” data would be consistent wit h less than one full shipment, (4) the Infodrive data from the investigation showed that the imports were of the same non-PET material, and (5) even if all of t he unidentified material in HTS 3907.60.20 (totaled over a 12-month period) were PET ch ips, the most that such quantity could be is 8.20 metric tons, or nearly half of the quant ity (totaled over a si x-month period) that Commerce rejected in the original investigat ion as insignificant. These appear to be sound arguments testing the reasonableness of Commerce’s unwillingness to consider as corroboration, the Infodrive data for HRS 3907.60.20. Commerce needs to provide an explanation that takes these considerations into account. These arguments, in turn, also lead to t he third and final matter requiring further explanation: Commerce’s use of a simple (as opposed to we ighted) average of the two HTS data sets. Because Commerce applied the si mple average for the first time in the Final Results, Respondents di d not have the opportunity to challenge that decisionConsol. Court No. 11-00061 Page 19

during the administrative revi ew. In their briefs befor e the court, Respondents have raised legitimate concerns that test the reasonableness of Commerce’s use of a simple average, which according to Respondents, give s “inordinate weight to a provision [HTS 3907.60.20] with very sma ll quantities [that] also does not consist of the kind of goods [that] comprise the factor of production.” Respondents’ Reply Br. at 8. Commerce needs to address the arguments raised by Re spondents, see Respondents’ Br. at 14- 17; Respondents’ Reply Br. at 8.

III. Conclusion Accordingly, it is hereby

ORDERED that this action is remanded to Commerce to address Respondents’ submissions regarding the su rrogate valuation of its labor inputs, as well as the inadvertent transposition of Green’s per- unit consumption levels for water and electricity; it is further

ORDERED that the Final Results are su stained with respect to Commerce’s calculation of Green’s packing mate rial expenses; it is further

ORDERED that Commerce on remand clarify or reconsider, as appropriate, the issues the court identified regarding Comme rce’s surrogate valuation of Respondents’ PET chips; it is further

ORDERED that Commerce shall file its rem and results on or before August 1, 2012; and it is furtherConsol. Court No. 11-00061 Page 20

ORDERED that, if applicable, the parties shall file a proposed scheduling order with page limits for comments on the remand results no later than seven days after

Commerce files its remand results with the court.

/s/ Leo M. Gordon Judge Leo M. Gordon Dated: June 1, 2012 New York, New York