Slip Op. 03 - 28



## UNITED STATES COURT OF INTERNATIONAL TRADE

____________________________________ : CARPENTER TECHNOLOGY CORP., : : Plaintiff, :

: v. :

: THE UNI TED STATE S, : : Defend ant. : ____________________________________: Before: M USGRAV

E, JUDGE

____________________________________ : Consol. Court No. 00-09-00447 VIRAJ IMPOEXPO L

TD., :

: Plaintiff, :

: v. :

: THE UNITED STATES : : Defend ant. : ____________________________________: [Antidumping duty remand deter mination sustained.] Decided: March 18, 2003 Collier Shannon Scott, PLLC, ( Robin H. Gilbert

), Wash ingto n, D.C., for the plaintiff Carpenter Technology

Corporation. Miller & Chev

alier ( Peter Koe

nig ), Washington, D.C., for the plaintiff Viraj I mpo exp o Ltd. Robert

D. McCall

um, Jr. , Assistant Attorney Gene ral, David M. Cohen , Director, Lucius B. Lau, Assistant

Director, Commer

cial L itigation Branc

h, CivilDivision , United States Departmentof Justice (Elizabeth G. Candler ), for defendant The United States; (of c ounsel : Willia m G. Isasi , Attorney, U.S. Depa rtment of Commerce).Consol. Court No. 00-09-00447 Page 2

OPINION This opinion presumes familiarity with Carpenter Technology Corp. v. United States , Slip Op. 02-77 (July

30, 2002) . Pr eviously, the Court found that “banding” to account for the absence of complete variable cost of manufac turing (“VCOM”) information was not unlawful pe r se f or the purpose of matching U.S. and foreig n market sales, however the matter was
re manded for clarification of the statement that banding ha d been undertaken “in order to obtai n
more identical matches.” Commerc e w as also r equeste d to clar

ify and, as n ecessa

ry , reconc ile Carpent er ’s allegation that it had applied different standards to Vira j Impoexpo Ltd. (“Vir

aj”) and Panchmahal Steel Ltd. (“Panc hmahal”). See Slip Op. 02-77 at 17-18. Remand has resulted in de minimi s antidumpin

g dutie s. Fo r U.S. sales that did not have
anidentical fore ign mar

ket match due to incomplete VCOM information, Commerce determined that the weig hted ave rage o f the dump ing mar gin cal culated

for matc hed sales is “ a reasonable approximation of dump ing attributable to Viraj’s unmatched sales beca use it is based on Viraj’s
ownsales data and the Department has found no fac ts on the re cor d to sugg est that su ch a use would b e distortive[ and] . . . it is consistent with Department practice.” Remand R esults at 4 , referencing Porcelain-on-steel Cooking War e from Mex ico: Fina l Results o f Antidump ing Duty Administrative Review , 58 Fed. Reg. 43327, 43329 (Aug. 16, 1993). Reg ardin g resort to “banding” to compensate for the incomplete V COM information, Commerce explains that

the facts of the rec ord suppo rt the co nclusion t hat banding

is a rea sonable alternative to the diff

erence inmer chandise analy sis. Specifically, Viraj’s direct materia ls costs ev

idence c ost diffe

rences betw een two s ize rang es. Co mmerce used banding

accord ing to the se two size

range s in th e absenc e of [complete] VCOM dat a. Therefore, where VCOM data w as not availab le due to confusion over reporting requireme nts, rather

th an lack ofConsol. Court No. 00-09-00447 Page 3
cooperation, the u se of ba nding as non-a dverse f acts othe rwise av ailable for Viraj was reasonable. Inaddition, Commerce reviewed the record with re spect to the “dispar ate ” treat ment betw een Vira j and Panc

hmahal. B ased on th

is review, Commerce

conclude d that such “dispar ity” is attribu

table to Panchmahal’s failure to cooperate ( i.e. , Panchma hal’s re fusa l to provide informationin the manner in which it was requested by the De p artm ent) .[] Furth ermore, the Department noted that Panchmahal never repor ted cos t data that took size into account for its comparison marke t, t hus precluding the Departm ent from b anding its sales or derivin

g any informat ion to make differences in merchandise adjustments to norm al value. Unlike Panchm aha l, and as affirmed by this Court, Viraj was a cooperative responde nt. * * *

. . . [W]hile the deficiencies [in Viraj’s and Panchmahal’s re spons es] may relate

to similar cost information, the Department determined

that the r

easons f or the de ficie nc ies were different. ([ I ]. e ., Viraj was con fused as to t he repo rting r equir ements while Panchmahal simply ref

used to report the requested data. See Final Resu lts at 4-7, 11- 13.) Th e Act clearly

authorizes the Department to treat responden t s dif ferent ly based on their level of cooperation. See 19 U.S.C. 1 677e(b)

. As such, the “disparate” tre atm ent of Viraj and Panchmahal does not violate the statute. Remand Determination at 3, 4-5 (internal citations omitted; highlighting in original). The government argues the r emand results should be sustai ned i n their entirety. Vira j has provided no commen

t. Carpen

ter Tec hnology Corpora ti on (“ Carpenter”) argues f or a different model-mat chin g methodolo gy and for a

differe nt marg in to assig

n to unmatc

hed sale s as fac ts otherwis e available. Specifically , Carpenter again takesi ssue with the fact that Commerce reached different results with respect to Panchmahal and Viraj. I t argues that on re ma nd the
correct interpr

etation o f the re

mand orde

r was for Commerce

to address in a substa

ntive man

ner any differe nce in the

responde

nts’ data submissions that suppo

rts use of

differe nt methodo logies a s to the two responde nts. To simply state that the di fferent methodologies are appropr iate because Panc hmahal f ailed to c ooperat

e in not pr

oviding c ostConsol. Court No. 00-09-00447 Page 4

1 Def.-Int ’s Com ments at 4, r eferen cing Antidumping Duties; Counterveiling Du ties ; Proposed Rule , 61 Fed. Reg. 730 8, 7339 (F eb. 27, 19 96) (“The Depar tment’s pr

actice is to calc ulate costs consistent with model matching criteria it develops [at the] out set of an inv estigation or review. The product categories deve loped in such fashi on generally account for significant differences in actual costs affecting price. The Depa rtment int ends to continue this

practic e becau se it preven ts any manipulation of the cost ana lysis through cha

nges in internal product classifications.”).

informationto enable

accura te produc t matching , when Commerce its elf recognizes that Viraj also did not pr ovide c ost information to enable sizespecific product matching, is a distinction without any me aning here

. Bec ause the t wo respo ndents bot h failed to provide

the requ ested da ta to Commerce that would have enabled the agenc y to make siz e-spec ific product matches, Co mmerce has no reasonable basis for pena lizing Pa nc hm ah al fo r t hi s f

ai lu re an d t re at in g V ir aj mu ch mo re fa vo ra bl y. Inits decision to apply an adverse facts avai l able ra te to Panchma hal, the D epar

tment high ligh ted the sig

nific ance of the size variable, noting th at Pan chmahal ’s “exclu sion of the size char acteris tic in its reported control numbers” was contrary to the instructions expresse d in the original questionnaire, and that it was a “necessity

” to report costs on a size basis. Decision Memorandum , at 6. Yet, d espite th e similar admission that Viraj’s costs were reported “irre spective of size altogether” (and, therefore, unusable), Commerce trea ted Viraj much m o re favorably by a pplying a “band ing” me thodolog y a nd by using no n-adver

se fact s available. Givent h is, the only way to correctly

respond to the Court’s re mand instructi ons was f

or Commer

ce to acknowledg e that the simil a r faili ngs of both co mpanies s hould hav e simila r co nsequences. As the Courthas said, “[i]t was in cumbent up on Commerc e to apply its rationale to all respondents similarly situated.” Def.-Int.’s Comments at 3-4. Carpenter complains that Commerce did not follow its policy o f calculatingcosts con sistent wit h model ma

tching criteria developed at the outset of an investigation

or review 1 with respect to Viraj although it applied that pol icy wit h respec

t to Panchmahal. Carpenter argu es that ba nding is n

ot a “neu tral” use of fact s otherwi se avail able because Comme rce here “made product comparisons without size-specific data by creatingConsol. Court No. 00-09-00447 Page 5

2 Indeed, Carpenter ’s argument could also be construed as a dvocacy

for similar treatment of Panch mahal. bands of merchandise s o broad that a certain amount of sales were thus destined to be ‘comparable’ to each other[,] . . . a ‘gift’ to Viraj, while Panchmahal was penalized for a similar deficiency

in its data.” Id . at 4-5. Commerce has correc tly interpreted the or der of remand. I

n its initial briefs, Carpenter challenged

Commerce’s determination on Viraj’s cooperativenes s b y arguin g inter alia that deeming Viraj cooperative and Panchmahal uncooper ative c o uld not be reconciled. Viraj’s cooperation

could be sustained on the basis of independent record evidenc e. Panchmahal is not a pa rty to this proc eeding , but the tr eatment o f its circ

umstance s also app eared r elevant to Carpenter’s allegation of a results-oriented determination. Rather than undertake arguendo
e xamination of the respective requests for data a nd responses from those respondents, t he Cour t considered

it appropriate to r

emand the

issue to Com

merce f or clar ification a nd , a s n ec es sa ry, reconciliation. The remand results adequately explain Commerce’s reasoning for its treatment of Viraj as dis tinct from P anchm ahal fo r purp oses o f this procee ding. 2 Carpenter also cont

inues to in sist th at “[ b]anding for either party has the effect of obviating , rather than corre cting, d ifferences in product charac teristics and the attendant matching p roblems caus ed by missing cost data .” Id. at 5. C arpent er all eges th at thr ough banding “a double

benefit was conferred, as the produc t matches tha t were s o dissimilar that they required constructed value

even af ter the products w ere re defin ed by two unive

rsal ‘ba nds’ produced a margin that was based o n already artificially construc

ted ‘identical matches.’” Id

. (italics in original).Consol. Court No. 00-09-00447 Page 6

Carpenter’s other ar

guments ess en ti al ly r estate arguments the Court rejected in ruling on the init ial motions for judgment on the agency record, see Slip Op. 02-77 at 16-17, and thes e argume nts are no more pers

uasive a t this time. A s noted in t he prior opinion, di ffere

nces in mercha ndise must generally

exceed 20

percen t b efo re merchandise is presumed not comparable. Car penter’s dou ble benefit theory , one of compounding, does not demonstrate, as a matter of fact, that banding produced di stort ed resul ts, that pr oducts wit

hin each band are so dissimila

r in size from thei

r counte rpart a s to be inco mparable, or that Commerce could not have been other than“satisfied” that a size difmer adjustment was absolutely necessary . Com merce ma y depart frompolicy

if it provi des a re aso n able explanation for doing so, e.g. , Industria de Fundicao Tupy v. United States , 20 CIT 875, 876, 936 F.Supp 1009, 1015 (1996), and it has done so her e. Carpenter lastly complains that it was unc lear why the Court observed that the 3.87 percent non-adverse less-tha

n- fair-value margin determined a gainst Grand Foundry

in 1994 appeared to be a “ten uous fit” to use for Viraj’s unmatched sales. The Court’s observa tion was based upon: (1)the age

of that ra te; (2) th e appar

ent l ack of c onnection between that respondent and the one at bar; (3) whether there is other e vidence in the record that C ommerce may
reasona bly conclude is more probative of V iraj’s present circumstances than the older nonadverse LTVF rate ( e.g. , the zero percent margin determined a gainst Viraj in 1997) ; and ( 4) the Court’s conclusion with respect to the government’s arg ument in opposition thereto. T he Cour t did not dire ct Commerce to use a particular rate, only that selected data have to evince a “rational re lationship b etween data chosen and the matter to which they apply.” Slip Op. 02-77 at 21 n.1 2, quo ting Manifattura Emmepi S.p.A. v. United States , 16 CIT 6 19, 624, 799 F.Supp. 110, 115 (1992).Consol. Court No. 00-09-00447 Page 7

Conclusion Commerce’s remand r

esults c omply with the prior opinion and order a nd will be sustained.

____________________________________________ R. KENTON MUSGRAVE, JUDGE Dated: March 18, 2003 New York, New York