Aristocraft of America, LLC v. United States, 331 F. Supp. 3d 1372

This is a CIT review of Commerce's remand results in an antidumping administrative review involving Shanghai Wells Hanger and related plaintiffs; court previously remanded two issues.
Plaintiffs challenge (1) Commerce's deduction for irrecoverable VAT (an 8% adjustment to export price/constructed export price) and (2) Commerce’s choice of three Thai companies' financial statements to calculate surrogate financial ratios.
Commerce relied on China’s 2012 VAT Circular (describing VAT, tax-payable and a ‘‘taxes prohibited from exemption and offset’’ formula) and Shanghai Wells’ accounting entries to justify the 8% irrecoverable VAT deduction.
Plaintiffs argue Commerce’s calculation is inconsistent with its own stated definition (irrecoverable VAT as unrefunded VAT on inputs/raw materials) and dispute Commerce’s interpretation/translation of an accounting code that supports the 8% figure.
For surrogate financial statements, Commerce used LS Industry, Sahasilp, and Mongkol; Plaintiffs argued only LS Industry fit Commerce’s stated preference for firms that draw wire from wire rod, citing poor-quality photos as evidence. Commerce found the record inconclusive and treated all three as equally suitable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Commerce reasonably calculated irrecoverable VAT as an 8% deduction from FOB export value when its definition refers to unrefunded VAT on inputs	Commerce: calculation conflicts with definition; Commerce should tie deduction to actual input VAT not recouped	Commerce: 2012 VAT Circular supports defining irrecoverable VAT as "taxes prohibited from exemption and offset" computed on FOB value; aggregate link to input VAT exists but transaction-level adjustment using VAT formulas and accounting data is appropriate	Remanded: court sustains Commerce’s reliance on the 2012 VAT Circular and Shanghai Wells’ accounting entries as evidentiary support but remands for Commerce to further explain/reconsider how the deduction accounts for input VAT actually not recouped on export sales
Whether Commerce reasonably selected three Thai firms (LS, Sahasilp, Mongkol) as surrogate companies rather than only LS Industry	Plaintiffs: LS Industry is the only firm shown to draw wire from wire rod; photos and evidence support using LS alone	Commerce: record photos are poor; alternative reasonable inferences exist; absence of explicit website statements for other firms does not prove they do not draw wire; all three are equally suitable	Affirmed: court sustains Commerce’s use of all three surrogate financial statements because the record is inconclusive and Plaintiffs failed to develop stronger evidence

Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir.) (explains substantial-evidence standard for Commerce determinations)
Universal Camera Corp. v. NLRB, 340 U.S. 474 (U.S.) (substantial-evidence review considers record detracting evidence)
DuPont Teijin Films USA v. United States, 407 F.3d 1211 (Fed. Cir.) (definition of substantial evidence)
Consolidated Edison Co. v. NLRB, 305 U.S. 197 (U.S.) (weight of evidence and inconsistent inferences doctrine)
Consolo v. Federal Maritime Comm’n, 383 U.S. 607 (U.S.) (possibility of conflicting conclusions does not preclude substantial evidence)
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (U.S.) (two-step framework for agency statutory interpretation)
United States v. Eurodif S.A., 555 U.S. 305 (U.S.) (agency interpretations govern absent unambiguous statutory language)
Mitsubishi Heavy Indus. Ltd. v. United States, 275 F.3d 1056 (Fed. Cir.) (agency permitted to choose among reasonable inferences from record)
QVD Food Co. v. United States, 658 F.3d 1318 (Fed. Cir.) (burden to develop administrative record lies with interested parties)