Court Opinion

ID: 4526625
Source: CourtListenerOpinion
Date Created: 2020-04-17 16:02:14.318453+00
Date Added: 2024-06-11T12:14:12.231567
License: Public Domain

Slip Op. 20-50

          UNITED STATES COURT OF INTERNATIONAL TRADE

SHENZHEN XINBODA INDUSTRIAL CO.,
LTD.,

                    Plaintiff,

v.                                                  Before: Claire R. Kelly, Judge

UNITED STATES,                                      Court No. 12-00174

                    Defendant,

and

FRESH GARLIC PRODUCERS
ASSOCIATION, ET AL.,

                    Defendant-Intervenors.

                             OPINION AND ORDER

[Sustaining in part and remanding in part the U.S. Department of Commerce’s final
results in the sixteenth administrative review of the antidumping duty order covering
fresh garlic from the People’s Republic of China.]

                                                               Dated: April 17, 2020

Gregory S. Menegaz, Alexandra H. Salzman, and J. Kevin Horgan, deKieffer &
Horgan, PLLC, of Washington, DC, for plaintiff Shenzhen Xinboda Industrial Co.,
Ltd.

Joseph H. Hunt, Assistant Attorney General, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, of Washington, DC, for defendant. With him
on the brief were Jeanne E. Davidson, Director, Reginald T. Blades, Jr., Assistant
Director, and Richard P. Schroeder, Trial Attorney. Of counsel was Brendan Saslow,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.
Court No. 12-00174                                                   Page 2

Michael J. Coursey and John M. Herrmann, Kelley Drye & Warren LLP, of
Washington, DC, for defendant-intervenors Fresh Garlic Producers Association,
Christopher Ranch L.L.C., The Garlic Company, Valley Garlic, and Vessey and
Company, Inc.

      Kelly, Judge:   Before the court is Plaintiff Xinboda Industrial Co. Ltd.’s

(“Xinboda”) motion for judgment on the agency record challenging various aspects of

the U.S. Department of Commerce’s (“Department” or “Commerce”) final results in

the sixteenth administrative review of the antidumping duty (“ADD”) order covering

fresh garlic from the People’s Republic of China (“PRC”). See [Pl.’s] Mot. J. Agency

R., Aug. 30, 2019, ECF No. 45. See Fresh Garlic from the [PRC], 77 Fed. Reg. 34,346

(Dep’t Commerce June 11, 2012) (final results of the 2009–2010 admin. review of the

[ADD] order) (“Final Results”), and accompanying Issues and Decisions Memo. for

the [Final Results], A-570-831, (June 4, 2012), ECF No. 54 (“Final Decision Memo”);

see also Fresh Garlic from the [PRC], 59 Fed. Reg. 59,209 (Dep’t Commerce Nov. 16,

1994) ([ADD] order) (“ADD Order”).

      Xinboda commenced this action 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) (2012).1 See Summons,

June 21, 2012, ECF No. 1; Compl., June 27, 2012, ECF No. 10.2 Xinboda challenges

1  Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2012 edition.
2 On December 10, 2012, this action was stayed pending the final and conclusive
determination of the appeal in the fifteenth administrative review of the ADD order
covering fresh garlic from the PRC. See Order, Dec. 10, 2012, ECF No. 27. The stay
ended in 2019 when the court issued its opinion and no party subsequently appealed.
See Shenzhen Xinboda Indus. Co. v. United States, 43 CIT __, 361 F. Supp. 3d 1337
(2019).
Court No. 12-00174                                                      Page 3

as unsupported by substantial evidence Commerce’s selection of surrogate values

(“SVs”) for Xinboda’s garlic bulb intermediate input as well as its selection of Tata

Global Beverages Limited’s (“Tata Tea”) unconsolidated financial statements to

calculate Xinboda’s surrogate financial ratios. See Pl.’s Memo. Supp. Mot. J. Agency

R. at 1–2, 14–44, Aug. 30, 2019, ECF No. 45-1 (“Pl.’s Br.”). Defendant and Defendant-

Intervenors Fresh Garlic Producers Association (“FGPA”) and its individual

members, Christopher Ranch L.L.C., The Garlic Company, Valley Garlic, and Vessey

and Company, Inc., request that the court sustain the Final Results in its entirety.

See Def.’s Resp. Pl.’s Mot. J. Agency R. at 1, 5–41, Dec. 18, 2018, ECF No. 50 (“Def.’s

Br.”); Def-Intervenors’ Resp. Opp’n Pl.’s Mot. J. Agency R. at 1–2, Jan. 9, 2020, ECF

No. 51 (“Def.-Intervenors’ Br.”). For the reasons set forth below, the court sustains

Commerce’s SV determination for Xinboda’s garlic bulb intermediate input and

remands for further consideration or explanation Commerce’s decision to rely on Tata

Tea’s unconsolidated financial statements to calculate Xinboda’s surrogate financial

ratios.

                                  BACKGROUND

          On December 28, 2010, Commerce initiated its sixteenth administrative

review of the ADD Order on fresh garlic from the PRC, for the period of review

November 1, 2009 through October 31, 2010 (“POR”), at the request of FGPA and its

individual members. See Initiation of Antidumping and Countervailing Duty Admin.

Reviews, 75 Fed. Reg. 81,565, 81,568–69 (Dep’t Commerce Dec. 28, 2010).            On
Court No. 12-00174                                                     Page 4

December 7, 2011, Commerce published its preliminary results. See Fresh Garlic

from [the PRC], 76 Fed. Reg. 76,375, 76,377–80 (Dep’t Commerce Dec. 7, 2011)

(prelim. results of the 2009–2010 [ADD] admin. review) (“Prelim. Results”), and

accompanying Issues and Decisions Memo for the [Prelim. Results], A-570-831, PD

134, Doc. No. INT_042256 (Nov. 30, 2011) (“Prelim. Decision Memo.”).3 Commerce

selected, inter alia, Xinboda and Golden Bird as mandatory respondents. See Prelim.

Results, 76 Fed. Reg. 76,376.4 Given that Commerce considers the PRC to be a non-

market economy (“NME”), Commerce calculated normal value by using India as the

primary surrogate country to value factors of production (“FOPs”).       See Prelim.

Decision Memo. at 6, 8–18. However, Commerce elected to apply its “intermediate

input methodology” to directly determine SVs for an intermediate input, garlic bulbs,

rather than select SVs for the FOPs used to produce that intermediate input. Id. at

11. As a result, Commerce approximated the SV of fresh garlic based on the value of

garlic bulbs, and selected prices of grade A and grade Super A (“grade SA”) garlic

3 During the sixteenth administrative review, Commerce switched from manual to

electronic filings of the administrative record. Therefore, there are two indices, one
manual and the other electronic, for the public and confidential documents. On
August 6, 2012, Defendant filed indices to the public and confidential administrative
records underlying Commerce’s final determination, on the docket, at ECF No. 22.
Citations to administrative record documents in this opinion are to the document
numbers Commerce assigned to such documents in the indices.
4Initially, Commerce selected three additional exporters as mandatory respondents,
but, following petitioners’ withdrawals of their requests for review, Commerce
rescinded review with respect to those exporters. See Prelim. Results, 76 Fed. Reg.
at 76,375–76.
Court No. 12-00174                                                  Page 5

bulbs5 from the Azadpur Agricultural Produce Marketing Committee’s “Market

Information Bulletin” (“APMC Bulletin”)6 as the best available information to value

Xinboda’s garlic bulb input. Id. at 12–13. In addition, Commerce selected Tata Tea

Ltd.’s (“Tata Tea”) 2010–2011 unconsolidated financial statement to calculate

surrogate financial ratios. See id. at 17–18.

      On June 11, 2012, Commerce published its Final Results. See generally Final

Results, 76 Fed. Reg. 34,346–49. Commerce continued to rely on garlic prices from

the APMC Bulletin, rather than the financial statements of Garlico Industries

Limited (“Garlico”), to value the garlic bulb input, because the APMC Bulletin prices

were publicly available, specific to the input, largely contemporaneous with the POR,

tax and duty exclusive, and represented a broad market average. See Final Decision

Memo at 11–36. Commerce adjusted the data by deducting a six percent commission

reflected in those prices. See id. at 23. In addition, Commerce continued to use Tata

Tea’s financial statements to calculate Xinboda’s surrogate financial ratios, finding

that its production processes—albeit of tea—were most similar to Xinboda’s fresh

garlic processing. See Final Decision Memo at 40–45. Commerce noted that there

5 The APMC Bulletin uses a grading system to classify garlic bulbs by size. See

Prelim. Surrogate Value Memo at Ex. 3, PD 136, Doc. No. INT_042261 (Nov. 30,
2011).
6The APMC comprise wholesale agricultural markets that operate on a daily basis.
See Final Decision Memo. at 18; see also Petitioners’ Information Submission at
App’x 7 at 1–2, PD 125, Doc. No. 7808 (July 12, 2011) (“Petitioners’ Info. Submission”).
Each day, the Azadpur APMC publishes prices of agricultural products, including
garlic. See Petitioners’ Info. Submission at Attach. 1.
Court No. 12-00174                                                           Page 6

was no evidence in the financial statements that indicated the company was in receipt

of countervailable subsidies. See Final Decision Memo at 42.

                JURISDICTION AND STANDARD OF REVIEW

      This 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) and 28 U.S.C. § 1581(c)

(2012), which grant the court authority to review actions contesting the final

determination in an administrative review of an ADD order. The court will uphold

Commerce’s determination unless it is “unsupported by substantial evidence on the

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

                                   DISCUSSION

I.   APMC Bulletin Prices to Value Garlic Bulbs

      Xinboda challenges Commerce’s decision to rely on the APMC Bulletin’s

pricing data to value garlic bulbs as unsupported by substantial evidence, arguing it

is not the best available information on the record. See Pl.’s Br. at 1–2, 14–17.

Rather, according to Xinboda, Garlico’s financial statements better reflect Xinboda’s

production process and similar purchasing power and trading; and, Garlico, like

Xinboda, pays farmgate prices for large quantities of garlic bulb inputs. Id. at 15–17.

However, should the court sustain Commerce’s use of the APMC Bulletin, Xinboda

argues Commerce should rely solely on grade A garlic bulb prices, because record

evidence indicates grade SA prices were subsumed into grade A prices. Pl.’s Br. at

17–19. In addition, according to Xinboda, Commerce must deduct certain costs and
Court No. 12-00174                                                           Page 7

expenses in order to bring the grade A prices closer to farmgate prices. See Pl.’s Br.

at 20–26. Defendant counters that Commerce’s decision to rely on the APMC Bulletin

is supported by substantial evidence, emphasizing Commerce’s preference for size-

specific data and noting deficiencies in Garlico’s financial statements. See Def.’s Br.

at 5, 8–25. Further, Defendant argues that Commerce reasonably rejected arguments

in the underlying proceeding that grade SA prices were subsumed into grade A prices,

see id. at 25–28, and that additional adjustments to grade A prices should be made,

see id. at 28–32.7   For the reasons that follow, the court sustains Commerce’s

determination to rely on the AMPC Bulletin prices to value Xinboda’s garlic bulb

input, including grade SA garlic bulbs, and its decision not to adjust the pricing data

further.

      A.    Use of APMC Bulletin Prices

      In an antidumping proceeding, if Commerce considers an exporting country to

be an NME, like the PRC, it will identify one or more market economy countries to

serve as a “surrogate” for that NME country in the calculation of normal value. See

19 U.S.C. § 1677b(c)(1), (4).8 Normal value is determined on the basis of FOPs from

7  Defendant-Intervenors “fully support and endorse the points and arguments” of
Defendant and raise one additional argument, namely that the court is not bound by
prior court decisions involving challenges to the final results of the fifteenth
administrative review. See Def.-Intervenors’ Br. at 1–4.
8Dumping occurs when merchandise is imported into the United States and sold at
a price lower than its “normal value,” resulting in material injury (or the threat of

                                                                  (footnote continued)
Court No. 12-00174                                                         Page 8

the surrogate country or countries used to produce subject merchandise.9 See id. at

§ 1677b(c)(1); see also 19 C.F.R. §§ 351.408(a)–(c) (2014).10 However, in certain

circumstances, Commerce will utilize its “intermediate input methodology” to apply

a SV to an intermediate input directly, as opposed to the FOPs used to yield that

intermediate input.11

material injury) to the U.S. industry. See 19 U.S.C. §§ 1673, 1677(34), 1677b(a). The
difference between the normal value of the merchandise and the U.S. price is the
“dumping margin.” See id. at § 1677(35). Commerce imposes antidumping duties
equal to the dumping margin to offset the dumping. See id. at § 1673; see generally
Dorbest Ltd. v. United States, 604 F.3d 1363, 1367 (Fed. Cir. 2010).
9 By statute, Commerce must value FOPs “to the extent possible . . . in one or more
market economy countries that are . . . at a level of economic development comparable
to that of the [NME], and . . . significant producers of comparable merchandise.” See
19 U.S.C. § 1677b(c)(4)(A)–(B); see also Import Admin., U.S. Dep’t Commerce, Non-
Market Economy Surrogate Country Selection Process, Pol’y Bulletin 04.1 (2004),
available at http://enforcement.trade.gov/policy/bull04-1.html (last visited Apr. 14,
2020). Commerce prefers to use data from one primary surrogate country. See 19
C.F.R. § 351.408(c)(2).
10 FOPs to be valued in the surrogate market economy include “hours of labor
required,” “quantities of raw materials employed,” “amounts of energy and other
utilities consumed,” and “representative capital cost, including depreciation.” See 19
U.S.C. § 1677b(c)(3).
11 Commerce applies its intermediate input methodology when the FOPs to produce
an intermediate input account for an insignificant share of total output, and the
burden to value each FOP to produce that intermediate input outweighs a possible
increase in accuracy in the normal value calculation. See Fresh Garlic from the
[PRC]-16th Admin. Review-Intermediate Input Methodology, PD 135, Doc. No.
INT_042257 (Nov. 30, 2011) (“Intermediate Input Memo.”) (citing Certain Frozen
Fish Fillets from the Socialist Republic of Vietnam, 68 Fed. Reg. 37,116 (Dep’t
Commerce June 23, 2003) (notice of final [ADD] determination of sales at less than
fair value), and accompanying Issues and Decision Memo. at 26–45, A-552-801, (June

                                                                 (footnote continued)
Court No. 12-00174                                                      Page 9

      Section 1677b requires Commerce to use “the best available information” to

value FOPs. 19 U.S.C. § 1677b(c)(1). Although Commerce has broad discretion in

deciding what constitutes the best available information, see QVD Food Co., Ltd. v.

United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011) (noting the absence of a definition

for “best available information” in the antidumping statute), it must ground its

selection of the best available information in the overall purpose of the antidumping

statute, calculating accurate dumping margins. See CS Wind Vietnam Co. v. United

States, 38 CIT __, __, 971 F. Supp. 2d 1271, 1277 (2014) (citing Rhone Poulenc, Inc.

v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)). “Commerce generally selects,

to the extent practicable, surrogate values that are publicly available, are product-

specific, reflect a broad market average, and are contemporaneous with the period of

review” (collectively, “selection criteria”). Qingdao Sea-Line Trading Co. v. United

States, 766 F.3d 1378, 1386 (Fed. Cir. 2014); see also Import Admin., U.S. Dep’t

Commerce, Non-Market Economy Surrogate Country Selection Process, Pol’y

Bulletin 04.1 (2004), available at http://enforcement.trade.gov/policy/bull04-1.html

(last visited Apr. 14, 2020).

16, 2003), available at https://enforcement.trade.gov/frn/summary/vietnam/03-
15794-1.pdf (last visited Apr. 14, 2020)). Commerce also applies the methodology
when valuing FOPs to produce an intermediate product would lead to an inaccurate
result, because a significant element of cost would not be adequately captured. Id.
(citing Carbon and Certain Alloy Steel Wire Rod from Ukraine, 67 Fed. Reg. 55,785
(Dep’t Commerce Aug. 30, 2002) (notice of final determination of sales at less than
fair value)).
Court No. 12-00174                                                    Page 10

      Commerce reasonably determines that the APMC Bulletin prices are the best

available information on the record to value the garlic bulb input.12      See Final

Decision Memo. at 15–23. Specifically, the APMC Bulletin prices satisfy Commerce’s

selection criteria as a specific, publicly available data source, reflecting a broad

market average and reported exclusive of taxes and duties. Id. at 15–19. With

respect to specificity, the APMC Bulletin catalogues raw garlic prices on size-based

grades. Id. at 17; see also Prelim. Surrogate Value Memo at Ex. 3, PD 136, Doc. No.

INT_042261 (Nov. 30, 2011) (“Prelim. SV Memo.”).        Given that “size is the key

component in the pricing of garlic[,]”13 Commerce explains that the APMC Bulletin

data enables it to construct “detailed and therefore accurate size/grade-specific”

normal value calculation by matching respondents’ 40–55 mm garlic bulbs with grade

A values and 55 mm or larger garlic bulbs with an average of grades A and SA values.

12   Commerce applies its intermediate input methodology to value respondents’
intermediate input garlic bulbs, because each respondent reported raw garlic inputs
as FOPs, rather than garlic seed and growing factors used to produce garlic bulbs.
See Prelim. SV Memo. at 2; see also Intermediate Input Memo. at 2.
13 Commerce refers to several past reviews in explaining that size and quality are
significant price-determinants of garlic bulbs. See Final Decision Memo. at 17 (citing
Fresh Garlic From the [PRC], 76 Fed. Reg. 37,321 (Dep’t Commerce June 27, 2011)
(final results and final rescission, in part, of the 2008–2009 [ADD] admin. review),
and accompanying Issues and Decisions Memo. at 10–15, A-570-831, (June 20, 2011),
available at https://enforcement.trade.gov/frn/summary/prc/2011-16072-1.pdf (last
visited Apr. 14, 2020); Fresh Garlic from the [PRC], 74 Fed. Reg. 29,174 (Dep’t
Commerce June 19, 2009) (final results and partial rescission of the 13th [ADD]
admin. review & new shipper reviews), and accompanying Issues and Decisions
Memo.       at     6–19,    A-570-831,       (June     8,   2009),   available      at
https://enforcement.trade.gov/frn/summary/prc/E9-14358-1.pdf (last visited Apr. 14,
2020)).
Court No. 12-00174                                                    Page 11

Final Decision Memo. at 17; see also Prelim. Decision Memo. at 13–14. Further,

Commerce reasonably finds the APMC Bulletin data to be publicly available—posted

at Azadpur facilities, available as a pamphlet at the market, and accessible through

electronic archives—as well as representative of a broad market average, in light of

the scope of the data and the volume of garlic traded at the market.14 Final Decision

Memo. at 16–19. Commerce, relying on findings in previous administrative reviews,

also determines that the APMC Bulletin prices are reported free of taxes and duties.

Id. at 19. Even though the APMC Bulletin prices are not fully contemporaneous for

grade SA garlic bulbs, prices for grades A, B, and C are contemporaneous with the

POR.15 Id. at 19, 35–36. Commerce, in light of its findings on each selection criteria,

finds that, taken together, they reveal the APMC Bulletin prices to be the best

available information to value the garlic bulb input.16 Id. at 19.

14 Specifically, as Commerce explains, the APMC received “nearly 26,000 MT” of

garlic from several states in India known to produce larger, high quality garlic,
indicating that the APMC Bulletin prices are “geographically and temporally
representative of the garlic industry in India.” Final Decision Memo at 18–19.
15Commerce adjusts the value of the grade SA prices to account for their non-
contemporaneity. Id. at 19; see also Prelim. Memo at 13–14 (“Because the Grade
Super-A prices reported by the APMC which are on the record of this review are from
2007-2008, the Department applied a garlic-specific Wholesale Price Index to the non-
contemporaneous data to make them contemporaneous to the POR.”)
16Xinboda argues that APMC Bulletin prices are distorted by pointing to a finding in
a report by the Indian Department of Agriculture & Co-operation (“AgriCorp Report”)
that states “[o]ver a period of time these [agricultural] markets have . . . acquired the
status of restrictive and monopolistic markets[.]” Pl.’s Br. at 24–25 (citing Xinboda
Final Surrogate Value Submission at Ex. 2, PD 155, Doc. No. SCA_047683 (Jan. 6,

                                                                     (footnote continued)
Court No. 12-00174                                               Page 12

      Although Commerce ultimately selects the APMC Bulletin data, it also

considers, but reasonably rejects, the financial statements of Garlico, as a possible

surrogate value alternative, because it finds that Garlico’s financial statements are

not specific, do not represent a broad market average, and contain discrepancies. See

Final Decision Memo. at 11–13. As Commerce explains, Garlico is a company that

primarily purchases and dehydrates fresh vegetables, including garlic, to make

powders and flakes. Id. at 12. Farmers cultivating garlic to be dehydrated plant and

harvest garlic to achieve maximum yield, without concern for size or appearance,

unlike farmers that sell raw garlic. See id. Commerce, therefore, reasons that the

raw garlic inputs purchased by Garlico would not be physically comparable, or

specific in size and quality, to those purchased by respondents, producers of whole

and peeled garlic. Id. Further, Commerce notes that Garlico’s financial statements

do not reflect a broad market average, because they reflect the experience of one

company, rather than, as preferred, transactions between many buyers and sellers.

Id. at 13. Moreover, Commerce observes several discrepancies—e.g., Garlico incurred

the exact same purchase expenses for two different agricultural products in two

consecutive years—that call into question the overall reliability of Garlico’s financial

2012) (“Xinboda SV Submission”)). However, as Commerce explains, the AgriCorp
Report merely demonstrates that the APMC market system “has resulted in an
increase in the cost of marketing which results in farmers obtaining low prices.” See
Final Decision Memo. at 23; see also Xinboda SV Submission at Ex. 2 at 58. Given
that Commerce selects a SV based on the price a processor would pay, not the price a
farmer obtains, Commerce reasonably rejects Xinboda’s argument. Final Decision
Memo at 23.
Court No. 12-00174                                                         Page 13

statements. See id. at 13, 41; see also Final Surrogate Value Memo. at 2–3, PD 224,

Doc No. TNT_077215 (June 4, 2012) (“Final SV Memo.”).17 Given that Garlico’s

financial statements do not satisfy Commerce’s selection criteria, unlike the APMC

Bulletin, Commerce reasonably selects the latter over the former to value the garlic

bulb input.18 Final Decision Memo. at 13.

      Notwithstanding the flaws Commerce identifies with the Garlico financial

statements, Xinboda maintains that they represent the best available information on

the record to calculate the garlic bulb input, because they reflect farmgate prices,

17   Commerce identifies further discrepancies in Garlico’s financial statements,
namely: the reported purchases of traded goods in one section does not match the
purchase values in another section of the financial statements; the cost of raw garlic
purchased matches the sales figure; and, the reported raw onion sales in one section
does not correspond to the raw onion sales in another. See Final SV Memo. at 2–3.
18Xinboda contends that Commerce does not similarly scrutinize the reliability of the
APMC Bulletin prices. See Pl.’s Br. at 21 (“[T]he Department’s critique of the Market
Value Chain Report holds equally true for the Azadpur Market data.”); see also Pl.’s
Reply Br. at 16–17, Feb. 5, 2020, ECF No. 52 (“Pl.’s Reply Br.”). Alleging defect in
Commerce’s analysis of the APMC Bulletin does not cure the defects Commerce
reasonably identifies in the Market Value Chain Report. Indeed, Commerce answers
the questions Xinboda poses in its moving brief concerning the APMC Bulletin’s data
collection and data quality. Compare Pl.’s Br. at 21 with Final Decision Memo. at 18.
Commerce reasonably explains that in “past cases, [the agency has] found official
government publications to be reliable and credible sources of information.” Final
Decision Memo. at 18 (citing Sebacic Acid from the [PRC], 69 Fed. Reg. 75,303 (Dep’t
Commerce Dec. 16, 2004), and accompanying Issues and Decision Memo. at 3–9, A-
570-825,           (Dec.          10,           2004),          available          at
https://enforcement.trade.gov/frn/summary/prc/E4-3678-1.pdf (last visited Apr. 14,
2020)).
Court No. 12-00174                                                       Page 14

unlike the AMPC Bulletin prices. See Pl.’s Br. at 15–17.19 Commerce addresses, and

reasonably rejects, this argument in the underlying proceeding. See Final Decision

Memo. at 19–23. In doing so, Commerce acknowledges that even if there may be

differences between the costs embedded in the respondents’ prices and the AMPC

Bulletin prices, the record demonstrates the products are fundamentally similar. Id.

at 21. Commerce explains respondents’ merchandise is not sold at farmgate prices,

which it defines as “the purchase price of raw garlic as it is harvested with no further

processing or handling, and including no additional charges.” Id. 19–20. Although

respondents averred in the underlying proceeding that they purchased raw garlic at

farmgate prices throughout the POR, Commerce points to record evidence that

indicates it would have been unlikely for Xinboda and Golden Bird to do so, given the

short window of garlic harvest, from May through early June. See id. at 20–21.

Rather, as respondents both noted, they purchased raw garlic from farmers that used

third-party cold storage in the months following the harvest season. Id. at 21. Even

in the absence of record evidence indicating the location of the cold storage,

Commerce reasons that the use of cold storage facilities, alone, would incur additional

19 Xinboda does not identify fault in Commerce’s analysis of the APMC Bulletin or

the Garlico financial statements. Rather, it points out evidence that, in its view,
indicate the superiority of the Garlico financial statements over the APMC Bulletin
to value the garlic bulb input—the very same evidence Commerce considers and
reasonably weighs in the underlying proceeding. See Pl.’s Br. at 15–17. The court
will not reweigh evidence. See Downhole Pipe, 776 F.3d at 1376.
Court No. 12-00174                                                           Page 15

costs on the part of raw garlic seller. Id.20 In addition, Xinboda, like Golden Bird,

ordered raw garlic bulbs based on bulb size, which, Commerce reasons, means that

the farmer selling that garlic, to meet Xinboda’s specifications, must “have gone

through the raw harvested garlic, cleaned it up, sorted it based on size and type,

placed it into large mesh bags, and, finally, delivered it to Xinboda’s processor Dadi.”

Id. Commerce points to these sorting and handling costs as additional evidence that

Xinboda, as well as Golden Bird, did not pay farmgate prices. Id. Therefore, and in

light of the type and timing of respondents’ input purchases, Commerce concludes

that the garlic purchased by respondents include sorting, handling, and storage costs

and, therefore, was not farmgate. Id. Xinboda does not take issue with Commerce’s

foregoing analysis, and its mere assertions fail to persuade that Commerce

unreasonably concludes that Xinboda did not pay farmgate prices.21

      Xinboda also contends that its purchasing power closely matches that of

Garlico. Pl.’s Br. at 15–16. Yet, to the extent that Garlico and Xinboda purchase

20 Xinboda restates an argument from the underlying proceeding, contending that the
price Garlico pays for raw garlic from local farmers, close to its processing plant, are
similar to the prices that Xinboda pays; and, as further support, Xinboda points to
Garlico’s location in the state of Madhya Pradesh, a major garlic producing region.
See Pl.’s Br. at 15–16. However, Commerce reasonably does not consider purchasing
from local or proximate farmers to bear on the issue of whether those farmers sorted,
handled, and stored garlic. See Final Decision Memo. at 20–21.
21In the underlying proceeding, Xinboda failed to fully define “farmgate prices.” See
Final Decision Memo. at 19–20. However, before the court, Xinboda points to the
Market Value Chain Report for the definition of farmgate as “includ[ing] expenses
such as sorting, grading, packaging, and loading[,]” see Pl.’s Br. at 26–27, which is
unavailing. Commerce reasonably determines, for reasons explained below, that the
Market Value Chain Report is unreliable. See Final Decision Memo. at 25–31.
Court No. 12-00174                                                 Page 16

similar large quantities of raw garlic, Xinboda does not explain why “[t]he

correspondence between the two companies” is paramount in the selection of a SV

data source, id. at 17, especially when, as Commerce reasonably determines, Garlico’s

financial statements do not satisfy its selection criteria and are unreliable. See Final

Decision Memo. at 11–13.        Therefore, Xinboda fails to undermine Commerce’s

reasonable decision to select the APMC Bulletin over the Garlico financial

statements. See id. at 24.

      B.    Use of Grade SA Prices in APMC Bulletin

      Xinboda argues that if Commerce continues to rely on the APMC Bulletin

prices, it should rely solely on contemporaneous grade A prices, and exclude non-

contemporaneous grade SA prices, because record evidence indicates that grade SA

prices have been subsumed into grade A prices. Pl.’s Br. at 17–19. Defendant

counters    that   Commerce’s    reliance   on   both   contemporaneous     and    non-

contemporaneous prices is supported by substantial evidence. Def.’s Br. at 17–28.

Specifically, Defendant contends that Commerce reasonably rejects the record

evidence on which Xinboda basis its claim as unreliable. Id. For the reasons that

follow, Commerce reasonably selects contemporaneous and non-contemporaneous

AMPC Bulletin prices for grade A and SA prices garlic bulbs, respectively.

      Generally, in the selection of SVs, Commerce prefers to use SVs that are fully

contemporaneous with the POR, because those SVs more accurately reflect a

respondent’s costs during the relevant POR. See Home Meridian Int’l, Inc. v. United
Court No. 12-00174                                                    Page 17

States, 772 F.3d 1289, 1295 (Fed. Cir. 2014). Although Commerce must select the

“‘best available information,’ . . . there is no requirement that the data be perfect.”

Id. at 1296. Thus, depending on the factual circumstances, Commerce may select

non-contemporaneous data over contemporaneous data. See id. at 1296 (recognizing

that Commerce has discretion in SV selection and may select non-contemporaneous

data).

         Commerce reasonably relies on non-contemporaneous grade SA prices from the

APMC Bulletin 2007–2008 to value certain-sized garlic bulbs. Given that grade SA

garlic bulbs compare to a “significant portion” of raw garlic inputs processed by

Xinboda and Golden Bird, Commerce explains that using prices from the APMC

Bulletin enables the construction of more accurate normal values, despite the non-

contemporaneity of the grade SA pricing data. See Final Decision Memo. at 32–36.

To specifically match the prices by grade reported in the APMC Bulletin with the

respondents’ purchase information, Commerce uses grade A prices to value garlic

bulbs with a range in diameter from 40–55 mm and an average of grades A and SA

prices to value garlic bulbs with a diameter of 55 mm or greater. Id. at 33. In

addition, Commerce adjusts the prices with a garlic-specific wholesale price index to

adjust the grade SA prices to the 2009–2010 POR. Id.

         Xinboda does not persuade that Commerce is unreasonable in selecting non-

contemporaneous grade SA prices to value its garlic bulb inputs, and it offers no

argument that Commerce should elevate contemporaneity, over specificity, in the
Court No. 12-00174                                                           Page 18

selection of SVs for the garlic bulb inputs. Rather, Xinboda’s argument proceeds from

the mistaken premise that because no grade SA garlic was allegedly sold at the

Azadpur Market during the POR, grade SA prices cannot be used to value garlic bulb

inputs sized 55 mm or greater. Pl.’s Br. at 17–19. Xinboda bases its claim on a

declaration, prepared by Xinboda, in which a researcher recounts interviews with

garlic traders (“Researcher Declaration”). See id. at 18; see also Xinboda Surrogate

Value Submission at Attach. Declaration, PD 148, Doc. No. EXT_047406 (Jan. 6,

2012) (“Xinboda SV Submission”).        However, Commerce reasonably finds the

Researcher Declaration to be unreliable, because: the researcher’s observations were

based on a single visit and interviews with eight vendors; the researcher’s credentials

were unclear; and, the researcher failed to provide details regarding the interviewed

vendors so that Commerce could corroborate the Research Declaration. See Final

Decision Memo. at 31; see also Xinboda SV Submission at Attach. Declaration. Even

if reasonable minds can disagree on Commerce’s assessment of the weight of

evidence, the agency’s determination of SVs for the garlic bulb input is consistent

with its selection criteria and supported by the record.22     Cf. Downhole Pipe &

Equipment, L.P. v. United States, 776 F.3d 1369, 1376 (Fed. Cir. 2015).

22 Xinboda contends that the court has “already ruled on this issue,” referring to

Shenzhen Xinboda Indus. Co. v. United States, 43 CIT __, 361 F. Supp. 3d 1337 (2019)
(“Shenzhen III”), where the court sustained, in the fifteenth administrative review,
Commerce’s exclusion of grade SA prices. See Pl.’s Br. at 19 (citing Shenzhen III, 43
CIT at __, 361 F. Supp. 3d at 1358–59). More generally, Xinboda argues that the

                                                                  (footnote continued)
Court No. 12-00174                                                           Page 19

      C.   Adjustments to APMC Bulletin Prices

      Xinboda argues that if the court sustains Commerce’s reliance on the APMC

Bulletin prices to value the garlic bulb input, Commerce must deduct costs and

expenses associated with bringing garlic bulbs to the Azadpur Market. See Pl.’s Br.

at 20–276.      Specifically, Plaintiff avers that “considerable mark-ups for

transportation, commissions, taxes, loading and unloading, and wastage and weight

loss” are reflected in the APMC Bulletin prices and should be deducted to more closely

approximate the farmgate prices Xinboda paid. See id. at 20. Defendant counters

that Plaintiff has failed to demonstrate that further adjustments than those

Commerce reasonably made are warranted. Def.’s Br. at 28–32. For the reasons that

follow, Commerce’s decision not to further adjust the APMC Bulletin prices is

sustained.

      Commerce has broad discretion not only to determine what data constitutes

the “best available information” to value FOPs and inputs, see QVD Food Co., 658

F.3d at 1323, but also to rely on such data without adjustment, provided its

court should carefully consider not only Xinboda III but two preceding decisions
concerning the fifteenth administrative review, given the similarity of issues
discussed in those opinions to those presently under consideration. See Pl.’s Reply
Br. at 1–6. However, each administrative review is a separate segment of an
antidumping proceeding and each with its own, unique administrative record, see,
e.g., Jiaxing Brother Fastener Co., Ltd. v. United States, 822 F.3d 1289, 1299 (Fed.
Cir. 2016). A determination must be supported by substantial evidence based on that
administrative record. Further, as Defendant-Intervenors observe, “one judge of the
United States Court of International Trade [(“CIT”)] is not bound by the decision of
another judge of the [CIT].” See Def.-Intervenor’s Br. at 3 (citing Algoma Steel Corp.
v. United States, 865 F.2d 240, 243 (Fed. Cir. 1989)).
Court No. 12-00174                                                          Page 20

methodology is reasonable in light of its obligation to calculate the dumping margin

as accurately as possible. See e.g., Shakeproof Assemb. Components, Div. of Ill. Tool

Works, Inc. v. United States, 268 F.3d 1376, 1382 (Fed. Cir. 2001); Timken Co. v.

United States, 26 CIT 434, 461, 201 F. Supp. 2d 1316, 1341 (2002).            Further,

Commerce has broad discretion in assessing the reliability of data. See, e.g., Vinh

Hoan Corp. v. United States, 39 CIT __, __, 49 F. Supp. 3d 1285, 1320 (2015); Wuhan

Bee Healthy Co. v. United States, 29 CIT 587, 593, 374 F. Supp. 2d 1299, 1304 (2005).

      Commerce’s decision not to apply further adjustments to the APMC Bulletin

price is reasonable because the basis for those adjustments is predicated on findings

contained in the Market Value Chain Report and Researcher Declaration, sources

Commerce determines to be unreliable. See Final Decision Memo 24–31. With

respect to the Market Value Chain Report—a report that provides information on

garlic price, quantity, and industry—Commerce finds the report to contain numerous

discrepancies, as well as missing supporting data to corroborate the findings, that

call into question its reliability. See Final Decision Memo at 24–31; see also Xinboda

SV Submission at Attach. Report.23 Commerce chronicles its concerns at length and

in detail, observing: record evidence controverts Xinboda’s claim that it had

23  Commerce’s reliability evaluation of research reports focuses on four factors: “(1)
the source and accuracy of the data; (2) explanation of the analysis/calculations; (3)
whether the underlying raw data was provided; and (4) explanation of how the data
was collected, sorted and analyzed.” Final Decision Memo. at 25.
Court No. 12-00174                                                       Page 21

commissioned the report, id. at 25–26;24 there are inconsistences as to when the

report was compiled,25 id. at 26; and, the report lacks underlying data analysis, or an

explanation of the methodology used, to support its conclusions. Id.

      That last discrepancy, in Commerce’s view, is of “most concern,” because “the

lack of analysis means that the Department cannot review how the data used as the

basis of the report was collected, compiled, analyzed and incorporated into, or

excluded from, the final conclusions.” Final Decision Memo. at 26. Specifically,

Commerce, in examining the so-called “primary” and “secondary” sources cited in the

Market Value Chain Report, finds that many are unidentified and, among those that

are specifically identified, the sources do not include supporting data or

documentation. Id. at 26–28.

      Regarding the three sources of “primary” data—information derived from

meetings with garlic experts, data derived from the Global AgriSystem, and

responses to questionnaires sent to growers, traders, and horticultural department

officials—Commerce finds each to be deficient. Id. at 26–27.     Meetings with garlic

24 Specifically, Commerce observes that the first page of the report states that an

exporter interested in the garlic trade commissioned the report. Final Decision
Memo. at 25; see also Xinboda SV Submission at Attach. Report at 1. Although
Commerce, citing confidentiality concerns, could not provide the name of that
exporter, it finds that there was no record evidence to support the inference that the
entity was related to Xinboda, conflicting with Xinboda’s statement that it had
commissioned the report. Id. at 25–26.
25The cover letter to the report dates to early 2011, while the report itself contains
garlic prices and quantities through November 2011, raising a question, in
Commerce’s view, as to when the report was compiled and finalized. Final Decision
Memo. at 26.
Court No. 12-00174                                                        Page 22

experts form the basis of data collected in Annexure 3, which lists monthly arrival

prices and quantities for major agricultural markets in India; however, the Market

Value Chain Report does not provide details of the meetings, how the data was

obtained, and whether any adjustments were made to the data. Id. at 27; see also

Xinboda SV Submission at Attach. Report at 55–65. The Market Value Chain Report

also cites to Global AgriSystem data regarding three production belts—

Mandsaur/Neemuch (Madhya Pradesh), Mainpuri/Gihror (Uttar Pradesh), and Kullu

(Himachal Pradesh)—but neither provides the raw data underlying the analyses nor

explains why the cited production belts were “important,” id. at 27; see also Xinboda

SV Submission at Attach. Report at 6, leaving Commerce unable to determine

whether this data was “reflective of the Indian garlic market in general.”          Id.

Similarly, the Market Value Chain Report relies on responses to questionnaires sent

to the growers, traders, and horticultural department officials. Id. Although the

Market Value Chain Report includes copies of the questionnaires and a list of those

surveyed, it does not provide the responses, making it impossible for Commerce to

evaluate whether the information collected was complete and the responses could be

considered representative of the general garlic market. See id.; see also Xinboda SV

Submission at Attach. Report at 68–78.

      Regarding secondary information, encompassing statistics on the garlic trade

and prices derived from multiple sources, Commerce explains that, in many

instances, the report fails to identify the specific sources and, as a result, Commerce
Court No. 12-00174                                                        Page 23

has no way to confirm the report’s reliance on those sources. Id. at 27–28. Where

citations to sources are provided, the report does not contain the underlying data used

to generate the statistics. Id. Further, even where the Market Value Chain Report

includes underlying data and supporting documentation, Commerce identifies

internal inconsistencies26 and inaccuracies27 that further undermine the reliability of

the report. Therefore, in light of these many issues, Commerce considers the Market

Value Chain Report unreliable and declines to give it probative weight. Id. at 29–31.

26 Commerce points to the Madhya Pradesh section of the report as emblematic of its

overall concerns regarding the reliability of the Market Value Chain Report. See
Final Decision Memo at 28 (citing Xinboda SV Submission at Attach. Report at 31–
38). Specifically, Commerce notes that a table entitled “Seasonal Farm Gate Prices
and the Price Trend,” which breaks out farmgate prices between harvesting season
and the rest of the year, does not provide dates; and, a second table on the same page,
entitled, “Table 4: Arrivals at APMC Neemuch, MP” (“Table 4”) does not include data
for certain months. See Final Decision Memo at 28; see also Xinboda SV Submission
at Attach. Report at 36. Further, Commerce, in attempting to reconcile the data in
the first table with the second, observes that the average prices in the second table
were much higher than the average prices in the first table. See Final Decision Memo
at 29. Turning to Table 4 in particular, Commerce explains that it expected that the
data in Table 4 would be based on the “primary” data in Annexure 3, which also
provides arrival prices and quantities for major markets in India. Id. However, the
figures do not match, and the Market Value Chain Report does not explain the
discrepancy. Id. These inconsistencies, as Commerce reasonably concludes, call into
question the accuracy of information throughout the report as well as indicate that
the information collected may not have been properly analyzed. Id.
27Even though the internal trade sections and supporting data at Annexure 4 are
based on data collected from the Food and Agricultural Organization of the United
Nations (“FAO”), Commerce notes that the data in the report do not match the cited
FAO data. Final Decision Memo. at 30; see also Xinboda SV Submission at Attach.
Report at 65–67. Without an explanation or reason for the discrepancies, Commerce
reasonably concludes that the report relied on inaccurate or secondary sources for the
FAO statistics, or the researcher erred in compiling data. Final Decision Memo. at
30.
Court No. 12-00174                                                         Page 24

      Likewise, Commerce expresses concerns about the reliability of the Researcher

Declaration that Xinboda submitted. See Final Decision Memo at 31 (citing Xinboda

SV Submission at Attach. Declaration).        Commerce questions the researcher’s

qualifications, because it is not clear whether this individual was a market researcher

or a field expert, when the researcher only attested to working in “import/export trade

for over 20 years.” Id. Further, the researcher chronicled observations based on a

single visit to the Azadpur Market and on interviews with eight unidentified vendors.

Id. Xinboda adduced no other additional information for Commerce to corroborate

the researcher’s claims. Id. Finally, Commerce notes that the researcher’s affidavit

was signed and notarized in 2011, but also contains an unexplained stamp date of

2010.    Id.   Taken together, Commerce reasonably finds that the Researcher

Declaration is unreliable . Id.

        Xinboda does not challenge Commerce’s explanations or its reliability

determinations,28 but, instead, persists in its view that it paid farmgate prices, which

the APMC Bulletin prices do not reflect, and, further, that the Market Value Chain

28  Rather, Xinboda refers to several articles that “corroborate” the Market Value
Chain Report and a field study therein. See Pl.’s Br. at 24–26 (citing Xinboda SV
Submission at Exs. 3–4). However, pointing to extraneous commentary does not
resolve the internal inconsistencies, discrepancies, and missing documentation and
data Commerce reasonably identifies in its analysis of the Market Value Chain
Report. Xinboda asks the court to substitute its judgment for Commerce’s and
reweigh evidence, which it cannot do. See Downhole Pipe, 776 F.3d at 1376.
Court No. 12-00174                                                        Page 25

Report and Researcher Declaration provide a basis to make adjustments29 that match

Xinboda’s purchasing experience. See Pl.’s Br. at 20–24. However, as explained

above, Commerce reasonably determines that Xinboda did not pay farmgate prices.

See Final Decision Memo. at 21. Moreover, Commerce acknowledges that although

Xinboda did not purchase its garlic bulb inputs at a market like Azadpur Market,

there was no information on the record demonstrating that the prices Xinboda paid

and the APMC Bulletin prices were fundamentally different. Id. at 24. Commerce

has no obligation to directly replicate the production experience of Xinboda, if doing

so would result in a determination of a less accurate SV for the garlic bulb input. See,

e.g., Nation Ford Chemical v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999).

      Moreover, in rehashing the same arguments that Commerce reasonably rejects

in the underlying proceeding, Xinboda asks the court to reweigh evidence, which it

cannot. Further it tasks the court with making a reliability determination when

Commerce has discretion to evaluate the reliability of evidence and when Xinboda

has not come forward with evidence that undermines Commerce’s reliability findings.

See Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966) (“[D]rawing two

inconsistent conclusions from the evidence does not prevent an administrative

agency's finding from being supported by substantial evidence.”); see also Vinh Hoan

Corp., 39 CIT at __, 49 F. Supp. 3d at 1320. Thus, Commerce reasonably determines

29 Specifically, Xinboda contends that “considerable mark-ups for transportation,

commissions, taxes, loading and unloading, and wastage and weight loss” should be
removed from the APMC Bulletin prices. See Pl.’s Br. at 20.
Court No. 12-00174                                                      Page 26

that the Market Value Chain Report and the Researcher Declaration are unreliable,

as Commerce highlights numerous and undisputed inconsistencies and discrepancies

that reasonably justify the concerns it raises, and that further adjustment to the

APMC Bulletin prices, based on the information contained in those two sources, is

not warranted.

II.   Selection of Financial Ratios

       Xinboda argues that Commerce reliance on Tata Tea’s unconsolidated

financial statements to derive financial ratios is unsupported by substantial evidence.

See Pl.’s Br. at 27–45.    According to Xinboda, Commerce erroneously chose the

unconsolidated financial statements of Tata Tea, an integrated producer of branded

tea, over those of Garlico, a non-integrated producer garlic flakes, which processes

garlic in a manner comparable to respondents. Id. at 27–28, 31–41. Xinboda further

contends that Commerce fails to address record evidence indicating that Tata Tea’s

financial statements were distorted by the receipt of countervailable subsidies. Id. at

41–45.    Defendant counters that Commerce reasonably selects Tata Tea’s

unconsolidated financial statements over Garlico’s because Tata Tea’s production

process is most similar to Xinboda’s and Commerce found Garlico’s financial

statements to be unreliable. Def.’s Br. at 32–38. In addition, Defendant argues that

Commerce reasonably determines that Tata Tea’s financial statements did not

contain sufficient evidence of subsidization. See Def.’s Br. at 38–41. For the following
Court No. 12-00174                                                   Page 27

reasons, Commerce’s decision to rely on Tata Tea’s statements is remanded for

further explanation or consideration.

      As explained above, in NME cases, Commerce determines normal value on the

basis of FOPs used to produce subject merchandise from a market economy surrogate

country or countries. See 19 U.S.C. § 1677b(c)(1). FOPs to be valued in the surrogate

market economy include “hours of labor required,” “quantities of raw materials

employed,” “amounts of energy and other utilities consumed,” and “representative

capital cost, including depreciation.” See id. at § 1677b(c)(3). After calculating the

total value of FOPs, Commerce will add to normal value “an amount for general

expenses and profit plus the cost of containers, coverings, and other expenses.” Id. at

§ 1677b(c)(1). To value general expenses and profit, Commerce calculates surrogate

financial ratios that the agency derives from the financial statements of one or more

companies that produce identical or comparable merchandise in the primary

surrogate country. See 19 C.F.R. § 351.408(c)(4); Dorbest Ltd. v. United States, 604

F.3d 1363, 1368 (Fed. Cir. 2010).       Specifically, Commerce calculates separate

surrogate financial ratios from the surrogate financial statement for selling, general,

and administrative expenses (“SG&A”); manufacturing overhead; and, profit. See,

e.g., Manganese Metal From the [PRC], 64 Fed. Reg. 49,447, 49,448 (Dep’t Commerce

Sept. 13, 1999) (final results of second admin. review).30

30  To do so, Commerce analyzes each financial statement line item and either assigns

                                                                  (footnote continued)
Court No. 12-00174                                                   Page 28

      By statute, Commerce “may disregard price or cost values without further

investigation if [it] has determined that broadly available export subsidies existed or

particular instances of subsidization occurred with respect to those price of cost

values or if those price or cost values were subject to an antidumping order.” 19

U.S.C. § 1677b(c)(5).   Congress thus tasked Commerce to “avoid using any prices

which it has reason to believe or suspect may be dumped or subsidized prices” when

valuing FOPs. Omnibus Trade and Competitiveness Act of 1988, Conference Report

to Accompany H.R. 3, H.R. Rep. No. 100-576 at 590-91 (1988) (Conf. Rep.), reprinted

in 1988 U.S.C.C.A.N. 1547, 1623-24; see also Nation Ford, 166 F.3d at 1378. In doing

so, Commerce is not expected "to conduct a formal investigation to ensure that such

prices are not dumped or subsidized," but is instead to “base its decision [as to

whether there is 'reason to believe or suspect'] on information generally available to

it at that time.” H.R. Rep. No. 100-576 at 590-91, 1988 U.S.C.C.A.N. at 1623-24.

Moreover, whether a determination is supported by substantial evidence is based on

the whole record, which includes evidence that detracts from its weight. Universal

Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951); Tudor v. Dep't of Treasury, 639

F.3d 1362, 1366 (Fed. Cir. 2011).

the line item value to a particular category—i.e., raw materials, labor, energy,
manufacturing overhead, finished goods, and profit—or excludes the value from its
calculation. Commerce then calculates separate surrogate financial ratios—for
manufacturing overhead, SG&A, and profit—based on the total value of each
category. Manganese Metal From the [PRC], 64 Fed. Reg. at 49,448.
Court No. 12-00174                                                       Page 29

      Commerce has not adequately explained why its choice of Tata Tea’s financial

statements to calculate surrogate financial ratios is reasonable in light of record

evidence that suggests that the company is or may be the beneficiary of subsidies.

Instead, Commerce focuses narrowly on the financial statements’ line items and fails

to address record evidence indicating subsidization. Specifically, Xinboda placed on

the record loan documents filed with the Government of India that show the

company’s receipt of packing credits and export credits. See Xinboda Final Surrogate

Value Submission at Ex. 33, PD 155, Doc. No. SCA_047683 (Jan. 6, 2012) (“Xinboda

Final SV Submission”).31 Each loan document32 is a hypothecation agreement, a type

of secured loan, where Tata Tea pledges collateral, e.g., movable assets, to obtain a

31  Xinboda notes that, in the past, Commerce has determined export and packing
credits to constitute countervailable subsidies. See Pl.’s Br. at 44–45 (citing
Polyethylene Terephthalate Film, Sheet, and Strip from India, 73 Fed. Reg. 75,672
(Dep’t Commerce Dec. 12, 2008) (final results of countervailing duty admin. review),
and accompanying Issues and Decision Memo. at 4–5, C-533-825, (Dec. 5, 2008),
available at https://enforcement.trade.gov/frn/summary/india/E8-29482-1.pdf (last
visited Apr. 14, 2020); Certain Hot-Rolled Carbon Steel Flat Products from India, 74
Fed Reg. 20,923 (Dep’t Commerce May 6, 2009) (final results and partial rescission
of countervailing duty admin. review), and accompanying Issues and Decision Memo.,
C-533-821,                        (Apr.      29, 2009),         available         at
https://enforcement.trade.gov/frn/summary/india/E9-10496-1.pdf (last visited Apr.
14, 2020)).
32Xinboda points to three loan documents: first, a “Supplemental Agreement of
Hypothecation of Goods and Assets for Increase in the Overall Limit” with the State
Bank of India, dated December 16, 2008; second, a “Deed of Hypothecation of Current
Assets” with Axis Bank Limited of Kolkata, dated October 30, 2009; and, an
“Unattested Deed of Hypothecation” with the Bank of Baroda, dated October 30,
2009. See Pl.’s Br. at 42; see also Xinboda Final SV Submission at Ex. 33.
Court No. 12-00174                                                         Page 30

credit. See generally id.33 The terms of those loan documents include the receipt of

export credits, packing credits, and export packing credits. See id.34 At least one loan

document stipulates that the loan is provided at below market rate. Id.35 Tata Tea’s

financial statements appear to catalogue receipt of these loans at Schedule 3 under

the line item “Working Capital Facilities,” which describes the constituent loans as

“[s]ecured by way of hypothecation of inventories, crop, book debts and movable

assets, other than plant and machinery and furniture, of the holding company.” See

Chengwu Yuanxiang Surrogate Value Comments at Ex. 2 at 107, PD 13, Doc No.

EXT_021742 (Aug. 11, 2011) (“Chengwu SV Cmts.”).36 Given that a “subsidy” may

take the form of a loan by a government authority that confers a benefit in the form

of more favorable lending terms than a recipient could obtain on the market, see 19

33 For example, in Tata Tea’s “Unattested Deed of Hypothecation” with the Bank of

Baroda, the collateral includes, inter alia, “ALL the current assets of the Borrower,
namely, stock of raw material, work-in-progress, finished goods, consumable stores,
spares[.]” See Xinboda Final SV Submission at Ex. 33.
34The “Supplemental Agreement of Hypothecation of Goods and Assets for Increase
in the Overall Limit” with the State Bank of India provides for an export credit of Rs
50 crore; the “Deed of Hypothecation of Current Assets” with Axis Bank Limited of
Kolkata confers a packing credit of Rs 14 crore; and, the “Unattested Deed of
Hypothecation” with the Bank of Baroda specifies a packing credit of Rs 14 crore. See
Pl.’s Br. at 42; see also Xinboda Final SV Submission at Ex. 33.
35The “Supplemental Agreement of Hypothecation of Goods and Assets for Increase
in the Overall Limit” specifies that the loan is provided at “2.75% below SBAR,” when
SBAR is 13%. See Xinboda Final SV Submission at Ex. 33.
36 As Xinboda points out, Tata Tea’s 2010–2011 financial statement generally
indicates the receipt of subsidies, noting, with respect to fixed assets, “[s]ubsidies
receivable from government in respect of fixed assets are deducted from the cost of
respective assets as and when they accrue.” See Chengwu SV Cmts. at Ex. 2. at 82.
Court No. 12-00174                                                          Page 31

U.S.C. § 1677(5), the loan documents and financial statements, together, suggest that

Tata Tea’s financial statements reflect subsidized prices. Even though Commerce

not only “note[s] instances in which the company may have received export incentive

or other general subsidies” in the financial statements but also acknowledges that

“Xinboda has placed loan documents on the record to demonstrate that Tata Tea has

received subsidies[,]” Commerce states, without any analysis or explanation, that it

“has found no evidence of these loans in the financial statements.”37 Final Decision

Memo. at 43. Commerce’s failure to engage with this evidence is not reasonable.

      Commerce’s apparent position is that it may rely on the financial statements

of a company that “may have received export incentive or other general subsidies” so

long as the Department has not previously found “that the[] subsidies were received

pursuant to a specific program . . . determined to be countervailable.” See Final

Decision Memo. at 43. If this a practice upon which Commerce relies, on remand,

Commerce should clarify its practice and, further, explain why it is reasonable, in

light of evidence of countervailable subsidies in this case. 38 .Although Congress did

37  Defendant argues that Commerce found “insufficient evidence of subsidization.”
Def.’s Br. at 38. However, Commerce neither scrutinized Tata Tea’s financial
statement given Xinboda’s allegations nor considered possible detracting evidence,
both analytic exercises that would shed light on whether there was sufficient evidence
of subsidization. Instead, Commerce merely states that it “found no evidence” of
alleged subsidies. Final Decision Memo. at 43.
38Commerce points to its practice of relying financial statements “as is” in calculating
surrogate financial ratios. See Final Decision Memo. at 43 (citing Certain Frozen

                                                                   (footnote continued)
Court No. 12-00174                                                         Page 32

not intend for Commerce to undertake a formal investigation as to whether prices are

subsidized, it did instruct Commerce to base its decision “on information generally

available to it at that time.” H.R. Rep. No. 100-576 at 590-91, 1988 U.S.C.C.A.N. at

1623-24. Commerce fails to address record evidence of possible subsidization and

fails to explain why such evidence would not suffice to constitute a “reason to believe

or suspect” that the reported prices in Tata Tea’s statements are subsidized. Here,

because Commerce does not consider information on the record regarding Tata Tea’s

receipt of subsidies, it unreasonably selects Tata Tea’s financial statements to

calculate surrogate financial ratios, which, irrespective of Plaintiff’s other concerns

regarding Tata Tea’s financial statements, merits remand.

                                   CONCLUSION

      In accordance with the foregoing, it is

      ORDERED that Commerce’s determination to rely on the AMPC Bulletin

prices to value Xinboda’s garlic bulb intermediate input, including grade SA garlic

Warmwater Shrimp From the [PRC], 72 Fed. Reg. 52,049 (Dep’t Commerce Sept. 12,
2007) (notice of final results and rescission, in part, of 2004/2006 [ADD] admin. and
new shipper reviews), and accompanying Issues and Decisions Memo. at 8–12, A-570-
893, (Sept. 5, 2007), available at https://enforcement.trade.gov/frn/summary/prc/07-
4495-1.pdf (last visited Apr. 14, 2020)). However, accepting financial statements as
they are does not explain how a reasonable examination of Tata Tea’s financial
statements yields no evidence of loans or justifies Commerce’s apparently cursory
assessment of “information generally available to it at that time,” namely the loan
documents on record. H.R. Rep. No. 100-576 at 590-91, 1988 U.S.C.C.A.N. at 1623-
24.
Court No. 12-00174                                                         Page 33

bulbs, and its decision not to adjust the APMC Bulletin prices further is sustained;

and it is further

      ORDERED that Commerce’s decision to rely upon Tata Tea’s financial

statements for the calculation of surrogate financial ratios is remanded for further

explanation or consideration consistent with this opinion; and it is further

      ORDERED that Commerce shall file its remand redetermination with the

court within 90 days of this date; and it is further

      ORDERED that the parties shall have 30 days thereafter to file comments on

the remand redetermination; and it is further

      ORDERED that the parties shall have 30 days to file their replies to

comments on the remand redetermination; and it is further

      ORDERED that Commerce shall file the administrative record within 14 days

of the date of filing of its remand redetermination.

                                                       /s/ Claire R. Kelly
                                                       Claire R. Kelly, Judge

Dated:       April 17, 2020
             New York, New York