United States Court of Appeals 

for the Federal Circuit ______________________ 

ESSAR STEEL, LIMITED,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee,

AND

UNITED STATES STEEL CORPORATION,

Defendant-Appellee.

______________________ 

2013-1416

______________________ 

Appeal from the United States Court of International 

Trade in No. 09-CV-0197, Senior Judge Judith M. Barzilay.

______________________ 

Decided: June 12, 2014

______________________ 

DANIEL MORRIS, Dentons US LLP, of Washington, DC, 

argued for plaintiff-appellant. With him on the brief was

MARK P. LUNN. 

DAVID D’ALESSANDRIS, Trial Attorney, Commercial 

Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-
2 ESSAR STEEL LIMITED v. US

appellee United States. With him on the brief were 

STUART F. DELERY, Assistant Attorney General, JEANNE 

E. DAVIDSON, Director, and PATRICIA M. MCCARTHY, 

Assistant Director. Of counsel on the brief was 

NATHANIEL HALVORSON, Attorney, International Trade, 

Office of the Chief Counsel for Trade Enforcement & 

Compliance, United States Department of Commerce, of 

Washington, DC. 

NATHANIEL B. BOLIN, Skadden, Arps, Slate, Meagher 

& Flom LLP, of Washington, DC, argued for defendantappellee United States Steel Corporation. With him on 

the brief were ROBERT E. LIGHTHIZER and JEFFREY D.

GERRISH. Of counsel were JAMES C. HECHT, of Washington, DC, and STEPHEN J. NARKIN, of Palo Alto, California.

______________________ 

Before NEWMAN, LOURIE, and TARANTO, Circuit Judges.

LOURIE, Circuit Judge. 

Essar Steel Ltd. (“Essar”) appeals from the decision of 

the United States Court of International Trade (the 

“Trade Court”) affirming the United States Department of 

Commerce’s (“Commerce”) corroboration of the adverse 

facts available (“AFA”) rate from the fifth administrative 

review of the countervailing duty order covering certain 

hot-rolled carbon steel flat products from India. See Essar 

Steel Ltd. v. United States, 908 F. Supp. 2d 1306 (Ct. Int’l 

Trade 2013). Because we agree with the Trade Court that 

Commerce corroborated the AFA rate to the extent practicable, we affirm.

BACKGROUND

Essar is an Indian steel manufacturer with a facility 

in the state of Chhattisgarh, India that imports hot-rolled 

carbon steel flat products into the United States. In 2008, 

Commerce initiated an investigation to assess whether 

Essar received countervailable subsidies for its iron ore 
ESSAR STEEL LIMITED v. US 3

products in India for the period of review from January 1, 

2007 through December 31, 2007. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 73 Fed. Reg. 

4829 (Jan. 28, 2008).

Commerce investigated Essar’s receipt of benefits 

from nine separate subsidies provided under the

Chhattisgarh Industrial Program (“CIP”) administered by 

the state government of Chhattisgarh. Essar, 908 F. 

Supp. 2d at 1310–11. In response to Commerce’s requests 

for information on its use of and benefit from the CIP 

subsidies, Essar repeatedly denied receiving any CIP 

subsidies based on a claim that Essar did not have any 

manufacturing facilities in Chhattisgarh. Essar Steel Ltd. 

v. United States, 678 F.3d 1268, 1275 (Fed. Cir. 2012). 

Commerce found, however, that Essar’s claims were 

contradicted by other information that Essar itself had 

placed on the record. Id. at 1274–79. During the fifth 

administrative review, the government of India and the 

state government of Chhattisgarh also failed to respond to 

Commerce’s requests for information on the CIP subsidies. Essar, 908 F. Supp. 2d at 1312.

Commerce therefore applied adverse facts in its May 

2009 final results and concluded that Essar did benefit 

from the CIP. Essar, 678 F.3d at 1271. Essar appealed 

Commerce’s final results to the Trade Court, and after 

numerous proceedings before the court and a remand 

back to Commerce, the United States government and 

United States Steel Corporation (“U.S. Steel”) appealed 

Essar’s use of and benefit from the CIP subsidies. Id. at 

1271–72. We upheld Commerce’s decision to apply AFA 

with respect to Essar’s use of and benefit from the CIP 

subsidies, noting “Essar’s dishonest denials of a facility in 

Chhattisgarh.” Id. at 1274–79. Essar then “contacted the 

[Trade Court] for guidance” with regard to corroboration 

of the AFA rate, which was an issue that was previously 

raised before the Trade Court but never resolved. Essar 
4 ESSAR STEEL LIMITED v. US

Steel Ltd. v. United States, 880 F. Supp. 2d 1327, 1328–29

(Ct. Int’l Trade 2012). The Trade Court then remanded

the case to Commerce with instructions to explain how it 

corroborated the AFA rate assigned to Essar for its participation in the CIP or why corroboration was not practicable. Id. at 1332.

Commerce filed its remand results explaining how it 

corroborated, to the extent practicable, the AFA rate 

assigned to Essar given that Essar, the state government 

of Chhattisgarh, and the government of India failed to 

cooperate during the fifth administrative review. Essar, 

908 F. Supp. 2d at 1309. Commerce explained that it 

applied a hierarchical methodology in selecting an AFA 

rate. Commerce first “sought to apply, where available, 

the highest, above de minimis [AFA] rate calculated for 

the identical program from any segment of the proceeding.” J.A. 114. Then, absent an above de minimis subsidy 

rate calculated for an identical program, Commerce 

sought an AFA rate “for a similar program.” Id.

Commerce then explained that there was no independent information on the record regarding companyspecific benefits under the CIP and that it therefore 

selected an alternate rate by following its practice of 

identifying subsidy rates from “similar” programs. Essar, 

908 F. Supp. 2d at 1310–11. Commerce originally identified nine CIP programs as countervailable subsidies 

divided into three categories: grants, indirect tax benefits, 

and the provision of land at less than adequate remuneration. Id. Commerce calculated Essar’s AFA rate by 

aggregating nine calculated subsidy programs deemed 

similar to the nine subprograms identified under the CIP 

using information provided by Essar and other Indian 

hot-rolled steel producers in other investigations. Id. 

For the four subprograms identified as providing indirect tax benefits, Commerce assigned a net subsidy rate of 

3.09% ad valorem, which had previously been calculated 
ESSAR STEEL LIMITED v. US 5

for Essar under the Indian state of Gujarat tax incentives 

program during the second administrative review of the 

underlying countervailing duty investigation of hot-rolled 

carbon steel flat products from India. Id. On remand, 

Commerce explained that the Gujarat tax incentives 

program was an indirect tax program that was similar to 

the CIP tax program because it reflected the government 

of India’s behavior in implementing an indirect tax program. Id. at 1311.

For the four subprograms identified as providing benefits in the form of a grant, Commerce assigned a net 

subsidy rate of 6.06% ad valorem, which was the subsidy 

rate calculated for the Steel Authority of India, Ltd.

(“Steel Authority”) under a grant program also identified 

during the underlying countervailing duty investigation. 

Id. On remand, Commerce explained that the subsidy 

rate calculated for the Steel Authority reflected the government of India’s behavior in implementing a grant 

program. Id. 

For the single subprogram identified as providing 

land for less than adequate remuneration, Commerce 

assigned a net subsidy rate of 18.08% ad valorem, which

was the subsidy rate calculated for a program involving 

the captive mining of iron ore from the fourth administrative review of the underlying countervailing duty investigation. Id. On remand, Commerce explained that the 

captive mining program was similar to the CIP program, 

and the captive mining program reflected the government 

of India’s behavior in implementing a program for providing a good for less than adequate remuneration. Id. The 

sum of the combined subsidy rates was 54.68%, which 

was the AFA rate Commerce had assigned to Essar. Id.

Commerce reported its remand results to the Trade 

Court, and Essar argued that although Commerce explained the methodology it used to determine the assigned AFA rate, Commerce failed to corroborate that
6 ESSAR STEEL LIMITED v. US

rate. Id. Essar also argued, inter alia, that Commerce (1) 

failed to consider whether Essar could have simultaneously benefited from all of the CIP programs at issue; (2) 

improperly applied the subsidy rate to the entire value of 

the finished merchandise; (3) failed to consider that Essar 

was found to benefit from two programs that purportedly 

had mutually exclusive eligibility criteria; and (4) failed to 

consider the purported maximum benefits for certain 

subsidy programs. Id.

The Trade Court found that Commerce had corroborated Essar’s AFA rate to the extent practicable under 19 

U.S.C. § 1677e(c) by utilizing calculated benefits from 

similar subsidy programs identified in the underlying 

countervailing duty investigation of hot-rolled carbon 

steel flat products from India. Id. at 1313. The court 

found that Essar, the only respondent, failed to cooperate 

in the administrative review in which it had the opportunity to provide company-specific information concerning 

the extent to which it had received benefits under the 

CIP. Id. at 1312. In addition, the court noted that the 

“Indian government” also failed to cooperate with Commerce’s request for information about the CIP. Id. As a 

result, because Commerce did not calculate countervailing 

duty rates in a prior proceeding, the Trade Court found 

that Commerce had limited data available about the CIP

and thus corroborated Essar’s AFA rate to the extent 

practicable. Id. The Trade Court also found that Essar 

had not presented its additional arguments to Commerce 

on remand, and therefore held that those arguments were 

waived. Id.

Essar timely appealed. We have jurisdiction pursuant 

to 28 U.S.C. § 1295(a)(5).
ESSAR STEEL LIMITED v. US 7

DISCUSSION

I 

We review decisions of the Court of International 

Trade without deference, applying the same substantial 

evidence standard of review that the Trade Court itself 

applies in reviewing Commerce’s determinations. Wheatland Tube Co. v. United States, 161 F.3d 1365, 1369 (Fed. 

Cir. 1998); Atlantic Sugar, Ltd. v. United States, 744 F.2d 

1556, 1559 n.10 (Fed. Cir. 1984).

Section 1677e covers determinations of a countervailing duty on the basis of facts available. See 19 U.S.C. 

§ 1677e. The relevant code provision relating to selecting 

secondary information for calculating an adverse inference provides as follows: 

(b) Adverse inferences

If the administering authority or the Commission 

(as the case may be) finds that an interested party 

has failed to cooperate by not acting to the best of 

its ability to comply with a request for information 

from the administering authority or the Commission, the administering authority or the Commission (as the case may be), in reaching the 

applicable determination under this subtitle, may 

use an inference that is adverse to the interests of 

that party in selecting from among the facts otherwise available. Such adverse inference may include reliance on information derived from– 

(1) the petition,

(2) a final determination in the investigation under this subtitle,

(3) any previous review under section 1675 of this 

title or determination under section 1675b of this 

title, or
8 ESSAR STEEL LIMITED v. US

(4) any other information placed on the record.

19 U.S.C. § 1677e(b) (emphasis added). The statute 

further provides for corroboration of that secondary 

information:

(c) Corroboration of secondary information

When the administering authority or the Commission relies on secondary information rather 

than on information obtained in the course of an 

investigation or review, the administering authority or the Commission, as the case may be, shall, 

to the extent practicable, corroborate that information from independent sources that are reasonably at their disposal.

Id. § 1677e(c) (emphasis added). 

Essar argues that Commerce failed to corroborate the 

secondary information it used in calculating the AFA rate. 

Essar also argues that the Trade Court erred in ruling 

that Commerce’s obligation to corroborate secondary 

information was obviated as a result of this court’s 

acknowledgement of Essar’s “dishonest denials” in the 

prior appeal. The United States and U.S. Steel respond 

that Commerce fully corroborated the AFA rate to the 

extent practicable, and, due to the failure of Essar, the 

government of India, and the state of Chhattisgarh to 

respond to Commerce’s request for information, there was 

no independent information on the record regarding 

company-specific benefits under the CIP for Commerce to 

use to corroborate. 

We agree with the United States and U.S. Steel that 

the Trade Court did not err in finding that Commerce’s 

corroboration of the AFA rate was supported by substantial evidence. Commerce’s ability to corroborate the 

secondary information under § 1677e(c) was limited by 

Essar’s lack of cooperation, and Commerce used a reasonably accurate estimate of the subsidy rates in accordance 
ESSAR STEEL LIMITED v. US 9

with § 1677e(b) that were calculated for Essar or other 

producers of hot-rolled carbon steel who were cooperating 

with Commerce in prior segments of the underlying 

investigation. 

Under § 1677e(b), if Commerce “finds that an interested party has failed to cooperate by not acting to the 

best of its ability to comply with a request for information 

. . . . [Commerce] may use an inference that is adverse to 

the interests of that party in selecting from among the 

facts otherwise available.” Id. § 1677e(b). That “adverse 

inference may include reliance on information derived 

from . . . any previous review under section 1675,” which 

covers administrative review of determinations. Id.

§ 1677e(b)(3). The sources used to calculate an AFA rate 

should “be a reasonably accurate estimate of the respondent’s actual rate, albeit with some built-in increase intended as a deterrent to noncompliance.” F.lli De Cecco 

Di Filippo Fara S. Martino S.p.A. v. United States, 216 

F.3d 1027, 1032 (Fed. Cir. 2000). 

Commerce, applying its hierarchical methodology for 

selecting an AFA rate for an uncooperative respondent, 

calculated the 54.68% AFA rate based on actual and 

verified subsidy data provided by Essar and other Indian 

hot-rolled steel producers for similar subsidy programs. 

Those similar programs included the Gujarat tax incentive program involved in the second administrative review, the grant program involving the Steel Authority 

previously identified during the underlying investigation, 

and the provision of land for less than adequate remuneration involving the captive ore mining program involved 

in the fourth administrative review. Accordingly, the 

rates from those similar programs were calculated during 

a “previous review under section 1675,” namely, the 

underlying countervailing duty investigation of hot-rolled 

carbon steel flat products from India. 19 U.S.C. 

§ 1677e(b)(3). Commerce’s calculation of an AFA rate was 
10 ESSAR STEEL LIMITED v. US

thus a reasonably accurate estimate of Essar’s actual rate 

under § 1677e(b).

Section 1677e(c) requires that Commerce “shall, to the 

extent practicable, corroborate that information from 

independent sources that are reasonably at their disposal.” 19 U.S.C. § 1677e(c) (emphasis added). Essar, the 

state government of Chhattisgarh, and the government of 

India failed to cooperate with Commerce and to provide 

company-specific benefits under the CIP, and the record 

lacked other independent information regarding companyspecific benefits pursuant to the CIP. Because there were 

no other independent sources of data on company-specific 

benefits, Commerce was limited in its ability to corroborate the information used to calculate the AFA rate. 

Nonetheless, in light of the failure of Essar to cooperate 

and the reasonably accurate nature of the secondary 

information that Commerce used under § 1677e(b), Commerce satisfied the requirement of corroborating the 

54.68% AFA rate “to the extent practicable.” Id.

There is also no indication that the Trade Court found 

that Commerce’s obligation to corroborate the secondary 

information was obviated as a result of our acknowledgement of Essar’s “dishonest denials” in the first appeal. 

Thus, the Trade Court did not err in finding that Commerce’s corroboration of the AFA was supported by substantial evidence. 

II

Essar argues that the Trade Court abused its discretion in refusing to hear additional arguments including 

that Commerce (1) failed to consider whether Essar could 

have simultaneously benefited from all nine CIP programs to achieve the aggregate AFA rate; (2) improperly 

applied the CIP subsidy rate to the finished goods when 

the subsidy would have benefited only an upstream 

component; and (3) failed to consider that certain CIP 

programs had maximum benefits. The United States and 
ESSAR STEEL LIMITED v. US 11

U.S. Steel respond that Essar failed to exhaust its administrative remedies regarding several new arguments on 

corroboration that Essar never raised to Commerce. 

The law provides that the Trade Court “shall, where 

appropriate, require the exhaustion of administrative 

remedies.” 28 U.S.C. § 2637(d). The doctrine of exhaustion provides “that no one is entitled to judicial relief for a 

supposed or threatened injury until the prescribed administrative remedy has been exhausted.” Sandvik Steel Co. 

v. United States, 164 F.3d 596, 599 (Fed. Cir. 1998). 

“Certain exceptions to the exhaustion requirement apply, 

such as where exhaustion would be a ‘useless formality,’ 

or where the party ‘had no opportunity’ to raise the issue 

before the agency.” Yangzhou Bestpak Gifts & Crafts Co., 

Ltd. v. United States, 716 F.3d 1370, 1381 (Fed. Cir. 2013) 

(quoting Jiaxing Brother Fastner Co. v. United States, 751 

F. Supp. 2d 1345, 1355–66 (Ct. Int’l Trade 2010). We 

review the Trade Court’s application of exhaustion of 

remedies for abuse of discretion. Corus Staal BV v. 

United States, 502 F.3d 1370, 1381 (Fed. Cir. 2007).

We agree with the United States and U.S. Steel that 

the Trade Court did not abuse its discretion in holding 

that Essar failed to exhaust its administrative remedies 

regarding the new arguments on corroboration. The 

record shows that Essar failed to raise any of the new 

arguments before Commerce, and it cannot therefore raise 

those arguments now on appeal. Sandvik, 164 F.3d at 

599. Those arguments were new when they were presented to the Trade Court, and there is no indication that 

exhaustion would have been a useless formality or that 

Essar lacked an opportunity to raise the argument before 

Commerce. Yangzhou Bestpak, 716 F.3d at 1381. Accordingly, the Trade Court did not abuse its discretion in 

finding that Essar failed to exhaust its administrative 

remedies.
12 ESSAR STEEL LIMITED v. US

CONCLUSION

For the foregoing reasons, we conclude that the Court 

of International Trade did not err in holding that Commerce corroborated the AFA rate from the fifth administrative review of the countervailing duty order covering 

certain hot-rolled carbon steel flat products from India to 

the extent practicable. We also conclude that the Trade 

Court did not abuse its discretion in finding that Essar 

failed to exhaust its administrative remedies. Accordingly, the judgment of the Trade Court is affirmed.

AFFIRMED