Court Opinion

ID: 6346503
Source: CourtListenerOpinion
Date Created: 2022-06-03 14:02:35.625518+00
Date Added: 2024-06-11T09:18:19.829902
License: Public Domain

Case: 20-2114    Document: 66     Page: 1   Filed: 05/24/2022

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

             HITACHI ENERGY USA INC.,
                  Plaintiff-Appellee

                             v.

                    UNITED STATES,
                    Defendant-Appellee

      HYUNDAI HEAVY INDUSTRIES CO., LTD.,
         HYUNDAI CORPORATION, USA,
               Defendants-Appellants
              ______________________

                        2020-2114
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:16-cv-00054-MAB, Judge Mark A. Barnett.
                  ______________________

                  Decided: May 24, 2022
                  ______________________

     MELISSA M. BREWER, Kelley Drye & Warren, LLP,
 Washington, DC, argued for plaintiff-appellee. Also repre-
 sented by ROBERT ALAN LUBERDA, DAVID C. SMITH, JR.

     JOHN JACOB TODOR, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee. Also repre-
 sented by JEFFREY B. CLARK, JEANNE DAVIDSON, FRANKLIN
 E. WHITE, JR.; DAVID W. RICHARDSON, Office of the Chief
Case: 20-2114    Document: 66     Page: 2    Filed: 05/24/2022

2                               HITACHI ENERGY USA INC.   v. US

 Counsel for Trade Enforcement & Compliance, United
 States Department of Commerce, Washington, DC.

    RON KENDLER, White & Case LLP, Washington, DC, ar-
 gued for defendants-appellants. Also represented by DAVID
 EDWARD BOND.
                  ______________________

     Before NEWMAN, LOURIE, and DYK, Circuit Judges.
 NEWMAN, Circuit Judge.
     Appellants Hyundai Heavy Industries Co. and Hyun-
 dai Corporation, USA (collectively, “Hyundai”) seek review
 of an antidumping duty determination for large power
 transformers imported from the Republic of Korea. This is
 the second administrative review (“POR2”). The results of
 the Original Investigation (“OI”) are reported at Large
 Power Transformers from the Republic of Korea: Final De-
 termination of Sales at Less Than Fair Value, 77 Fed. Reg.
 40857 (July 11, 2012) (“Issues and Decision Memoran-
 dum”).
     When an administrative review is requested, the anti-
 dumping duty is redetermined. 19 U.S.C. § 1675(a)(1)(b).
 The first administrative review (“POR1”) is reported at
 Large Power Transformers from the Republic of Korea: Fi-
 nal Results of Antidumping Administrative Review; 2012-
 2013, 80 Fed. Reg. 17034 (Mar. 31, 2015).
     The second administrative review was initiated in Au-
 gust 2014, and the results are reported at Large Power
 Transformers from the Republic of Korea: Final Results of
 Antidumping Duty Administrative Review; 2013-2014, 81
 Fed. Reg. 14087 (Mar. 16, 2016). This determination was
 subject to four appeals to the Court of International Trade,
 with three remands to the Department of Commerce
 (“Commerce”). The court’s final decision, reported at ABB,
Case: 20-2114    Document: 66      Page: 3    Filed: 05/24/2022

 HITACHI ENERGY USA INC.   v. US                                 3

 Inc., v. United States, 443 F. Supp. 3d 1354, 1357 (Ct. Int’l
 Trade 2020), is the subject of this appeal. 1
     This appeal of the second review concerns the applica-
 tion of 19 U.S.C. § 1677m(d), which requires Commerce to
 notify and permit a party to remedy or explain any defi-
 ciency in information provided during an investigation.
 Commerce asserts that this statute did not apply to the cir-
 cumstances herein; thus Commerce did not permit Hyun-
 dai to provide additional information relevant to
 Commerce’s change of methodology concerning normal
 value and sales price of service-related revenue. Com-
 merce then applied an adverse inference and partial facts
 available to increase the dumping margin.
     We conclude that Commerce erred in its statutory com-
 pliance as a matter of law, and we remand for redetermi-
 nation of the antidumping duty applied to Hyundai’s
 imports, based on the calculation of service-related reve-
 nue. Hyundai has the statutory right to correct the defi-
 ciencies that led to the application of adverse inferences
 and partial facts available.
                        BACKGROUND
     An antidumping duty may be levied on imported prod-
 ucts that are sold or likely to be sold in the United States
 at less than fair value, when such sales threaten or cause
 material injury to a domestic industry. 19 U.S.C. § 1673.

     1   There have been third, fourth, and fifth adminis-
 trative reviews, and appeals of the third and fifth adminis-
 trative reviews previously reached the Federal Circuit.
 The subject matter of those appeals is unrelated to the is-
 sue now before us. See Hyundai Heavy Indus. Co., Ltd. v.
 United States, 819 Fed. Appx. 937 (Fed Cir. 2020) (third
 review); Hyundai Elec. & Energy Sys. Co., Ltd. v. United
 States, 15 F.4th 1078 (Fed. Cir. 2021) (fifth review).
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4                               HITACHI ENERGY USA INC.   v. US

 To determine whether an imported product is sold at less
 than fair value, Commerce determines the normal value of
 the product in the home market, and the export (sales)
 price in the United States. 19 U.S.C. §§ 1675(a)(2)(A),
 1677(b)(a). “Normal value” is “the price at which the for-
 eign like product is first sold . . . for consumption in the
 exporting country.” 19 U.S.C. § 1677b(a)(1)(B)(i).
     This appeal concerns methodology for valuation of ser-
 vice-related revenue associated with Korean large power
 transformers, in determining normal value and sales price.
 In POR2, on a first appeal of Commerce’s decision, the
 Court of International Trade remanded this issue to Com-
 merce, at the Government’s request. In response, Com-
 merce changed its methodology for determination of
 service-related revenue.
     Hyundai then asked Commerce for permission to pro-
 vide additional data and information. Hyundai wrote:
 “With respect to the factual flaws discussed above, the De-
 partment should reopen the record and issue a supple-
 mental questionnaire to collect information regarding the
 New Test for service-related revenue.” Appx10067. Hyun-
 dai proposed “If the Department continues to apply the
 New Test, it must provide Hyundai with an opportunity to
 place relevant information on the record, by issuing a sup-
 plemental questionnaire.” Id. at 10069. Commerce denied
 the request, and calculated the antidumping margin based
 on the original information.
     Hyundai reported service-related revenue in accord-
 ance with the Commerce questionnaire. Antidumping
 Duty Questionnaire – Hyundai Heavy Industries, C18 (Nov.
 18, 2014) see Response to Supplemental Sections B and C
 Questionnaire (Jun. 3, 2015) (“Where the terms of sale re-
 quire Hyundai to perform such services, the gross unit
 price includes the value of services required.”).
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 HITACHI ENERGY USA INC.   v. US                                  5

     In the second administrative review, Hyundai followed
 the same procedure as previously accepted by Commerce
 during the original investigation and the first administra-
 tive review. See POR1 Final Results, 80 Fed. Reg. at
 17035. ABB Enterprise Software, Inc. (now Hitachi En-
 ergy USA, Inc., herein, “ABB”) objected to this methodol-
 ogy, stating that it overstated the prices of Hyundai’s
 United States sales. Commerce rejected the objection, stat-
 ing that it had reviewed Hyundai’s invoices and purchase
 orders and that Hyundai had properly responded to the
 questionnaire. Commerce stated:
     Based on our review of the record evidence at veri-
     fication and comments by interested parties, we
     have determined to rely upon Hyundai’s reported
     [gross unit price] for purposes of calculating net
     U.S. price for its sales . . . We find that there is no
     evidence, based on the invoices and purchase or-
     ders examined at verification, to indicate that
     Hyundai has separate revenues which it has failed
     to report to Commerce.
 Original Investigation, Issues & Decision Memorandum,
 Comment 4 (July 2, 2012) (summarized at 77 Fed. Reg.
 40857 July 11, 2012).
       ABB appealed to the Court of International Trade, ob-
 jecting to several aspects of the Commerce procedure, in-
 cluding service-related revenues. Commerce requested a
 voluntary remand “to reconsider its application of its reve-
 nue-capping practice in this case, in light of this practice .
 . . [and to] evaluate whether its application of this practice
 is consistent with respect to both respondents.” Def.’s
 Suppl. Mem. Addressing Standard for Voluntary Remand,
 ABB, Inc. v. United States, No. 1:16-cv-00054 (Ct. Int’l
 Trade May 19, 2017), ECF No. 79; Appx 9945. The court
 stated that “Commerce’s concerns are substantial and le-
 gitimate” and remanded for consideration. ABB, Inc. v.
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6                               HITACHI ENERGY USA INC.   v. US

 United States, 273 F. Supp. 3d 1200, 1205 (Ct. Int’l Trade
 2017).
    On remand, Commerce revised its methodology for de-
 termining service-related revenue:
    Commerce’s capping methodology is not dependent
    upon whether a respondent must provide the ser-
    vice under the terms of sale as Hyundai contends,
    but whether such services were provided and
    whether the revenue amounts collected for the pro-
    vision of such services exceed the cost of those ser-
    vices. Neither is Commerce’s capping methodology
    dependent upon whether the service-related ex-
    penses and revenues are separate line-items on an
    invoice to the unrelated customer . . . Commerce’s
    capping methodology, generally, may nevertheless
    be applied notwithstanding whether the amounts
    are specified in sales contracts with, or invoices to,
    the customer. If a respondent collects, as a portion
    of the final price to the customer, a portion of reve-
    nue which is dedicated to covering a service-related
    expense, and that service-related expense is less
    than the revenue set aside to cover the expense,
    then this is service-related revenue which is part of
    the material terms of sale and must be capped.
 Final Results of Redetermination Pursuant To Court Re-
 mand, ABB, Inc. v. United States, No. 1:16-cv-00054 (Ct.
 Int’l Trade Feb. 7, 2018), ECF No. 95; Appx105-06. Com-
 merce stated:
    Hyundai cannot prevent the application of Com-
    merce’s capping methodology based on a technical-
    ity concerning whether a respondent chooses to
    separately itemize service-related charges in sales
    contracts or invoices. Commerce’s determination
    in this remand redetermination is not a change in
    methodology, but is instead an appropriate
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 HITACHI ENERGY USA INC.   v. US                                7

    application of our capping methodology pursuant to
    the statute and past practice.
 Appx106.
      Commerce changed the way it was evaluating the data,
 for these changes required identification of which services
 were provided, and cost and price information regardless of
 whether they were separately negotiated or part of the
 sales price. Since Commerce found Hyundai’s original sub-
 missions inadequate to determine the service-related reve-
 nue in this adjusted manner, Hyundai requested
 permission to provide additional information in conformity
 with 19 U.S.C. § 1677m(d). See Letter from Hyundai Heavy
 Indus. Co. to Wilbur L. Ross, Jr., Secretary of Commerce,
 Case No. A-580-867 (Dep’t of Commerce Jan. 16, 2018) (Re-
 questing Reopening of the Record in Order to Submit New
 Information); Appx10064-100102. The statute provides:
    (d) Deficient submissions.
    If the administering authority or the Commission
    determines that a response to a request for infor-
    mation under this subtitle does not comply with the
    request, the administering authority or the Com-
    mission (as the case may be) shall promptly inform
    the person submitting the response of the nature of
    the deficiency and shall, to the extent practicable,
    provide that person with an opportunity to remedy
    or explain the deficiency in light of the time limits
    established for the completion of investigations or
    reviews under this subtitle.
 19 U.S.C. § 1677m(d)
     In its first remand Commerce applied a new test. As
 described by Hyundai, “Under the New Test, which the De-
 partment now seeks to apply in the Draft Remand, service-
 related revenue exists if certain sales documents identified
 revenue for the service, regardless of whether Hyundai was
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8                                HITACHI ENERGY USA INC.   v. US

 required to provide the service under the terms of sale.”
 Appx10069. Commerce applied its new method of deter-
 mining whether service-related revenue existed for Hyun-
 dai, and then “the Department immediately states that
 ‘information is missing from the record due to Hyundai’s
 failure to report service-related revenues’ and that this jus-
 tifies the application of partial facts available.” Id.
     In its request to submit additional information, Hyun-
 dai stated that “the Department appears to view its Origi-
 nal Test for service-related revenue to be incorrect.
 Reopening the factual record is therefore not only within
 the Department’s discretion, it is necessary.” Id. at 10085.
 Denying Hyundai’s request to provide additional infor-
 mation, Commerce stated that its “determination in this
 remand redetermination is not a change in methodology,
 but is instead an appropriate application of our capping
 methodology pursuant to the statute and past practice.”
 Id. at 106. Commerce characterizes Hyundai’s responses
 as “avoidance,” stating that “Hyundai cannot prevent the
 application of Commerce’s capping methodology based on a
 technicality concerning whether a respondent chooses to
 separately itemize service-related charges in sales con-
 tracts or invoices.” Id.
     Commerce found that “Hyundai failed to cooperate to
 the best of its ability by not providing the information re-
 quested. Therefore, partial adverse facts available is war-
 ranted.” Id. at 108. Commerce then determined the normal
 value and sales price for service-related revenue, on ad-
 verse inference and partial facts available, and increased
 Hyundai’s dumping margin to 25.51 percent. Id. at 116.
 Commerce acknowledged Hyundai’s request to reopen the
 investigation and allow the submission of information re-
 lated to the new methodology but did not respond, stating
 only that Hyundai failed to cooperate. Id. at 108.
     Hyundai appealed, stating that “the Department’s con-
 clusions rest on the unreasonable assertion that Hyundai
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 HITACHI ENERGY USA INC.   v. US                                   9

 should have known that the Department would retroac-
 tively revise its test with respect to service-related revenue
 two years after it issued the Final Results.” Defendant-In-
 tervenors' Comments in Opposition to the Final Results of
 Redetermination Pursuant to Court Remand, ABB Inc. v.
 United States, No. 1:16-cv-00054 (Ct. Int’l Trade Mar. 20,
 2018), ECF No. 106. It is not disputed that Hyundai re-
 sponded fully to Commerce’s questionnaire.
     Hyundai also argued that the additional information
 Commerce was requesting was contained in previously
 submitted “invoices listing separate line items for ser-
 vices[.]” Final Results of Redetermination Pursuant to
 Court Remand, ABB Inc. v. United States, No. 1:16-cv-
 00054 (Ct. Int’l Trade Apr. 26, 2019), ECF No. 150;
 Appx41-42. However, Commerce refused to consider infor-
 mation from this source, stating that Hyundai “did not
 alert” Commerce to “invoices listing separate line items for
 services” and therefore “failed to cooperate to the best of its
 ability.” Id. at 41-42.
     The Court of International Trade observed that
 § 1677m(d) requires Commerce to notify and permit rem-
 edy of any deficiency: “The Government further argues that
 Commerce did not have an obligation to comply with
 § 1677m(d) because the agency was not aware of the defi-
 ciencies in Hyundai's reporting until it discovered the un-
 derlying information evincing Hyundai’s misreporting for
 the first time at verification.” 2 ABB Inc. v. United States,

     2    “Verification” is conducted, 19 U.S.C. § 1677m(i)(3),
 by visiting the foreign company’s facilities to review “all
 files, records and personnel” relevant to the inquiry. See
 19 C.F.R. § 351.307(d). Commerce conducted onsite verifi-
 cation at Seoul and Ulsan, Korea from July 16 through July
 24, 2015. Mem. from Dep’t of Commerce to File, Case No.
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 10                             HITACHI ENERGY USA INC.   v. US

 355 F. Supp. 3d 1206, 1216 (Ct. Int’l Trade 2018). The court
 stated: “When a respondent provides seemingly complete,
 albeit completely inaccurate, information, § 1677m(d) does
 not require Commerce to issue a supplemental question-
 naire seeking assurances that the initial response was
 complete and accurate.” Id. at 1222.
     However, the court found: “It was not until Commerce
 sorted through Hyundai's sales documentation that the
 agency recognized that Hyundai's documentation was in-
 consistent with its reporting.” Id. The court concluded,
 “under these circumstances, Commerce was not statutorily
 mandated to provide Hyundai a subsequent opportunity to
 remedy the deficiency.” Id. at 1223.
      The court remanded for redetermination, explaining
 that Commerce had impermissibly relied on internal
 Hyundai communications as evidence of service-related
 revenue. Id. The remand included instructions “that the
 agency may not apply its capping methodology to those
 transactions or services for which Commerce relied only on
 internal communications among Hyundai employees or af-
 filiates” to determine service-related revenue. Id.
     In response to this second remand, Commerce applied
 the court’s ruling that Hyundai’s internal communications
 were not evidence of service-related revenue. Final Results
 of Redetermination Pursuant to Court Remand ABB Inc. v.
 United States, No. 1:16-cv-00054 (Ct. Int’l Trade Apr. 26,
 2016), ECF No. 150; Appx46. Commerce accepted Hyun-
 dai’s argument that certain revenues were not service re-
 lated, and Commerce did not apply the “capping”
 methodology to these revenues. “The documentation for
 SEQU 1 does not contain any service-related revenue.” Id.
 at 42. However, Commerce did not accept Hyundai’s

 A-580-867 (Dep’t of Commerce Aug. 31, 2015) (on file with
 author). Appx9264.
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 HITACHI ENERGY USA INC.   v. US                                  11

 renewed request for permission to provide additional infor-
 mation on service-related revenue to comport with Com-
 merce’s new procedures.
      Based on the continued application of adverse facts
 available, and applying changes to other factors, Com-
 merce assessed a dumping margin of 16.58 %. Id. at 57.
 On Hyundai’s appeal, the court again remanded to Com-
 merce on issues not challenged on this appeal. On this re-
 mand, Commerce addressed those issues and set the
 dumping margin at 16.13%. Final Results of Redetermina-
 tion Pursuant to Court Remand, ABB Inc. v. United States,
 No. 1:16-cv-00054 (Ct. Int’l Trade Apr. 14, 2020), ECF No.
 182; Appx4-14. Hyundai appealed a fourth time, and the
 court sustained Commerce’s Third Remand Results. ABB,
 Inc. v. United States, 437 F. Supp.3d 1289 (Ct. Int’l Trade
 2020).
     Now, before us, Hyundai presses its objection to Com-
 merce’s refusal to allow correction of any deficiencies in the
 information previously submitted, as required by 19 U.S.C.
 § 1677m(d). We conclude that Hyundai is correct that the
 statute requires the opportunity to remedy any deficiencies
 in the information of record.
                           DISCUSSION
 Standard of Review
     On appeal of a decision of the Court of International
 Trade concerning an antidumping duty determination of
 the Department of Commerce, we review the decision of
 Commerce on the same standard that is applied by the
 Court of International Trade. “Commerce's determination
 should therefore be upheld unless it is unsupported by sub-
 stantial evidence on the record or is not in accordance with
 law.” Dupont Teijin Films USA, LP v. United States, 407
 F.3d 1211, 1215 (Fed. Cir. 2005); see also SNR Roulements
 v. United States, 402 F.3d 1358, 1361 (Fed. Cir. 2005).
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 12                                HITACHI ENERGY USA INC.   v. US

      “[T]his court must review the entire record for substan-
 tial evidence and compliance with the law. Substantial ev-
 idence is ‘such relevant evidence as a reasonable mind
 might accept as adequate to support a conclusion.’” Am.
 Silicon Techs. v. United States, 334 F.3d 1033, 1036-37
 (Fed Cir. 2003) (citing Universal Camera Corp. v. N.L.R.B.,
 340 U.S. 474, 477 (1951)). “The court shall hold unlawful
 any determination, finding, or conclusion found . . . to be
 unsupported by substantial evidence on the record, or oth-
 erwise not in accordance with law[.]” 19 U.S.C. §
 1516a(b)(1)(B)(i).
 The Issues on Appeal
     Hyundai appeals three rulings of Commerce that were
 sustained by the Court of International Trade: (1) Com-
 merce’s refusal to permit Hyundai to remedy the an-
 nounced deficiency in reported information about service-
 related revenue, as required by 19 U.S.C. § 1677m(d);
 (2) Commerce’s ruling that Hyundai had not cooperated to
 the best of its ability, thereby supporting use of adverse in-
 ferences, 19 U.S.C. § 1677e(b); and (3) Commerce’s use of
 adverse facts available in these circumstances.
                               A
      Hyundai’s Request to Supplement the Record
      Hyundai’s request to supplement the record is in ac-
 cordance with law. After Commerce modified its method-
 ology for determination of service-related revenue after the
 first remand, Hyundai sought to provide data and infor-
 mation related to the new methodology. See Final Results
 of Redetermination Pursuant to Court Remand, ABB Inc. v.
 United States, No. 1:16-cv-00054 (Ct. Int’l Trade Apr. 26,
 2019), ECF No. 150; Appx28-57.

    Hyundai states that its record documents already
 showed the break-out information now required by
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 HITACHI ENERGY USA INC.   v. US                                13

 Commerce. In response to Commerce’s original question-
 naire and “consistent with prior segments of this proceed-
 ing,” Hyundai separately reported service-related revenue
 where there existed “a separate purchase order for . . . the
 transformer (e.g., supervision) but that related to the
 transformer.” Letter from Hyundai to Commerce Re: Anti-
 dumping Administrative Review of Large Power Trans-
 formers from Korea - Response to Sections B and C
 Questionnaires (Jan. 26, 2015); Appx2408. Hyundai ex-
 plained that the relevant service-related revenue was pro-
 vided in separate fields as Commerce had requested.
 “ADDPOPRU is sales amount under a separate purchase
 order for services that were not included in the purchase
 order for the transformer (e.g., supervision), but that are
 related to the transformer. ADDPOEXPU is the expense
 associated with the additional services.” Id.

     In response to Hyundai’s submission, Commerce sent a
 supplemental questionnaire directed to several items. U.S.
 Department of Commerce, Supplemental Questionnaire for
 Sections B and C of Hyundai Heavy Industries and Hyun-
 dai Corporation USA's Responses to the Antidumping Duty
 Questionnaire (May 22, 2015); Appx6140. Hyundai re-
 sponded to each question. Concerning service-related rev-
 enue, Hyundai explained, “Where the terms of sale require
 Hyundai to perform such services, the gross unit price in-
 cludes the value of services required.” Hyundai Heavy In-
 dustries Co, Ltd., Antidumping Administrative Review of
 Large Power Transformers from South Korea - Response to
 Supplemental Sections B and C Questionnaires (Jun. 3,
 2015); Appx6162.

     Commerce had previously rejected ABB’s objections to
 Hyundai’s responses in Commerce’s initial action on the
 second administrative review:
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 14                             HITACHI ENERGY USA INC.   v. US

      We cannot conclude that necessary information is
      not available on the record, nor can we find that
      Hyundai withheld information requested by the
      Department, that it failed to provide such infor-
      mation in the form or manner requested, that it
      acted to significantly impede the proceeding, or
      that it provided requested information that could
      not be verified.
 Issues and Decision Memorandum for Final Results of An-
 tidumping Duty Administrative Review: Large Power
 Transformers from the Republic of Korea: 2013-2014, Com-
 ment 15 (Mar. 8, 2016); Appx9649. Commerce stated that
 Hyundai’s documentation “show[s] no indication that
 Hyundai improperly reported its sales data.” Id.
      These findings cannot be reconciled with Commerce’s
 later ruling that Hyundai had “not cooperate[d] to the best
 of its ability.” Commerce supported its refusal to permit
 Hyundai to provide additional information, by stating that
 Hyundai had not previously provided information to the
 best of its ability: “We have determined not to allow Hyun-
 dai to submit such information because Hyundai had [am-
 ple] opportunity to submit the factual information during
 the course of the original proceeding, pursuant to 19 CFR
 351.301.” Letter from Dep’t of Commerce to Hyundai Heavy
 Industries Co., Ltd. & Hyundai Corporation USA, Re: Re-
 mand Order of the U.S. Court of International Trade for
 ABB Inc. v. United States concerning Antidumping Duty
 Administrative Review of Large Power Transformers from
 the Republic of Korea; 2013- 2014: Request to Submit Ser-
 vice-Related Revenue Data from Hyundai Heavy Industries
 Co., Ltd. and Hyundai Corporation USA, No. 1:16-cv-
 00054, Slip Op. 18-156 (Mar. 22, 2019); Appx10368.
      After the first remand, Commerce determined that ser-
 vice-related revenue would no longer be defined by the
 terms of the sale as it was in the original investigation, the
 first review, and the initial findings of the second review.
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 HITACHI ENERGY USA INC.   v. US                                   15

     “Commerce’s capping methodology is not depend-
     ent upon whether a respondent must provide the
     service under the terms of sale as Hyundai con-
     tends, but whether such services were provided
     and whether the revenue amounts collected for the
     provision of such services exceed the cost of those
     services. Neither is Commerce’s capping method-
     ology dependent upon whether the service-related
     expenses and revenues are separate line-items on
     an invoice to the unrelated customer.”
 Final Results of Redetermination Pursuant To Court Re-
 mand, ABB Inc. v. United States, No. 1:16-cv-00054 (Ct.
 Int’l Trade Feb. 7, 2018), ECF No. 95; Appx105-106. Thus
 documentation of the line-item breakouts became a factor
 in the administrative review.
     Commerce’s denial of Hyundai’s request to provide any
 necessary information was contrary to the statute, which
 states in relevant part that Commerce “shall promptly in-
 form the person submitting the response of the nature of
 the deficiency and shall, to the extent practicable, provide
 that person with an opportunity to remedy or explain the
 deficiency.” 19 U.S.C. § 1677m(d). The Court of Interna-
 tional Trade has previously interpreted the statute to per-
 mit supplementation. See SKF USA Inc. v. United States,
 391 F. Supp. 2d 1327, 1336 (Ct. Int’l Trade 2005) (“Clarity
 regarding what information is requested by Commerce is
 important, especially in cases such as this where there was
 confusion as to whether or not requests for data were made
 and whether or not these requests were refused.”). In SKF
 the court admonished that it is impermissible for Com-
 merce to delay reporting that a respondent has provided
 insufficient information until after it is too late to correct.
 “Pursuant to 19 U.S.C. § 1677m(d), if the Department
 wished to place the burden of error on SKF, it had to make
 clear and give SKF a chance to correct the error prior to the
 issuance of a final decision.” Id. at 1336-37.
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 16                                 HITACHI ENERGY USA INC.   v. US

     In a separate proceeding on a later administrative re-
 view and a different issue, Hyundai Steel Co. v. United
 States, 282 F. Supp. 3d 1332, 1349 (Ct. Int’l Trade 2018),
 the court held that Commerce’s failure to timely notify a
 party of deficiency “is itself a violation of § 1677m(d).” It is
 undisputed that no such notification was given. The gov-
 ernment states in its brief that Commerce was not required
 to permit Hyundai to provide additional information be-
 cause the deficiency in question was not determined until
 “verification.” Gov’t Br. 31. However, the statutory entitle-
 ment to notice and opportunity to remedy any deficiency is
 unqualified. Hyundai also observes that data with the
 breakouts of revenue in separate line items were already
 in Commerce’s possession, although it was not required by
 Commerce’s questionnaire. Commerce erred, in denying
 the opportunity to remedy the asserted deficiency.
                                B
             Adverse Inferences and Applied
                  Partial Facts Available
      Commerce drew adverse inferences and applied partial
 facts. When necessary information is missing or unavaila-
 ble, Commerce is authorized to consider whatever facts are
 available, 19 U.S.C. § 1677e(a), and to “use an inference
 that is adverse to the interests of that party in selecting
 from among the facts otherwise available” when the party
 has “failed to cooperate by not acting to the best of its abil-
 ity to comply with a request for information.” 19 U.S.C. §
 1677e(b)(1). See Nat'l Nail Corp. v. United States, 390 F.
 Supp. 3d 1356, 1373 (Ct. Int’l Trade 2019) (“[T]he use of
 ‘facts otherwise available,’ to fill in gaps, applies when nec-
 essary information is lacking, regardless of the reason for
 its absence . . . An adverse inference, on the other hand,
 may only be drawn where the reason underlying the ab-
 sence of necessary information was the respondent's failure
 to cooperate to ‘the best of its ability,’ that is, where the
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 HITACHI ENERGY USA INC.   v. US                                   17

 respondent failed to do the maximum it was able to do.”)
 (citation omitted).
     Commerce is authorized to draw an adverse inference
 and to apply the highest dumping margin when the re-
 spondent fails to do the maximum. See Maverick Tube
 Corp. v. United States, 857 F.3d 1353, 1361 (Fed. Cir. 2017)
 (adverse inference based on adverse facts available may be
 appropriate when an interested party has been notified of
 a defect in its questionnaire response yet continues to pro-
 vide a defective response).
      Section 1677e(a)(2)(D) requires that the authorization
 to rely on adverse facts available is subject to § 1677m(d),
 which requires Commerce to provide notice and an oppor-
 tunity to remedy a deficiency. Commerce has no authority
 to apply adverse facts and inferences unless the respondent
 has failed to provide requested information when notified
 of the deficiency, and has not acted to the best of its ability
 in responding to such requests. 19 U.S.C. § 1677e(a). See
 also Canadian Solar Inc. v. United States, 537 F. Supp. 3d
 1380, 1398 (Ct. Int’l Trade 2021) (holding that “Commerce
 must give Canadian Solar an opportunity to correct any de-
 ficient information”); Shelter Forest Int'l Acquisition, Inc.
 v. United States, 497 F. Supp. 3d 1388, 1401 (Ct Int’l Trade
 2021) (“Commerce must raise identified deficiencies such
 as this one and provide respondents with an opportunity to
 explain, correct or supplement it.”).
      Commerce is permitted by 19 U.S.C. § 1677e(b)(1)(A) to
 draw adverse inferences “in selecting from the facts avail-
 able” when “an interested party has failed to cooperate by
 not acting to the best of its ability to comply with a request
 for information.” Taian Ziyang Food Co. v. United States,
 637 F. Supp.2d 1093, 1118 (Ct. Int’l Trade 2009). To this
 end, Commerce “must make a finding that a party has
 failed to act to the best of its ability when complying with
 a request for information from Commerce.” Id. Here,
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 18                             HITACHI ENERGY USA INC.   v. US

 Commerce made adverse inferences and relied on adverse
 facts, although there was no refusal to provide the infor-
 mation whose absence created a gap that required the use
 of facts available. Hyundai explains how this error in-
 creased the dumping margin:
      [B]ecause it rejected Hyundai’s request to submit
      additional information, the Department was una-
      ble to determine whether there was SRR for the re-
      maining sales.      As partial adverse FA, the
      Department reduced all other U.S. gross unit
      prices “by the highest percentage difference be-
      tween service-related revenue and the service-re-
      lated expenses from the SEQUs with usable
      service-related expenses” on the record. This sub-
      stantially increased the dumping margin.
 Hyundai Br. 29 (internal citations omitted). “Before mak-
 ing adverse inference, Commerce must examine a respond-
 ent’s actions and assess the extent of the respondent’s
 abilities, efforts, and cooperation in responding to Com-
 merce requests for information.” Nippon Steel Corp. v.
 United States, 337 F.3d 1373, 1382 (Fed Circ. 2003). Com-
 merce made no such examination, and on this appeal, the
 only excuse offered for Commerce’s failure to provide
 Hyundai with a notice of deficiency and the opportunity for
 remedy, was that Commerce “discovered” the deficiency
 only on “verification.” This argument does not track Com-
 merce’s prior position that the deficiency arose when Com-
 merce changed its methodology to satisfy a prior remand
 from the Court of International Trade.
     The government does not assert that Hyundai withheld
 information, or committed any of the transgressions in §
 1677e(a)(1) or (2). The government agrees that Commerce
 changed its methodology, and the government acknowl-
 edges that “Commerce’s analysis has evolved in this pro-
 ceeding.” Gov’t Br. 29.
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 HITACHI ENERGY USA INC.   v. US                                 19

     The Court of International Trade affirmed Commerce’s
 departure from the statute, and departed from its own
 precedent; See Borusan Mannesmann Boru Sanayi ve Ti-
 caret A.S. v. United States, 61 F. Supp. 3d 1306, 1345-48
 (Ct. Int’l Trade 2015), aff’d sub nom Maverick Tube Corp.
 v. United States, 857 F.3d 1353 (Fed. Cir. 2017) (Commerce
 must provide a sufficiently detailed explanation of the “na-
 ture of the deficiency” and must permit the respondent to
 correct the deficiency).
     The record herein provides no basis for an adverse in-
 ference and recourse to adverse facts available. It is undis-
 puted that any incompleteness of sales data and
 information could have been remedied by the proffered in-
 formation, but for Commerce’s refusal to permit Hyundai
 to provide this information. No reasonable justification
 has been offered for that refusal despite Hyundai’s re-
 peated requests. The invocation of adverse inferences and
 use of partial facts available is unsupported by substantial
 evidence in the record.
                       CONCLUSION
     Commerce erred in law, refusing to permit Hyundai to
 supplement the record with information concerning ser-
 vice-related revenue. Commerce thus relied on incomplete
 data to determine antidumping duties. The Court of Inter-
 national Trade erred in ratifying that refusal. We vacate
 the Court of International Trade’s affirmance on this issue,
 and we vacate the court’s affirmance of Commerce’s re-
 course to adverse inferences and partial facts available, for
 that action was a result of the erroneous exclusion of infor-
 mation. We remand with instructions for redetermination
 of any dumping margin, on complete information provided
 in conformity with law.
                VACATED AND REMANDED
                             COSTS