2018 CIT 68
Ct. Intl. Trade2018Background
- Commerce completed the first administrative review (2011–2012) of an antidumping duty order on multilayered wood flooring from China and in amended final results assigned Fine Furniture (a mandatory respondent) a 5.92% margin, and de minimis margins to the other mandatory respondents; Commerce then assigned Fine Furniture’s margin to numerous separate-rate respondents.
- Fine Furniture and other Chinese exporters challenged Commerce’s calculations and methodologies in the Court of International Trade; the court remanded certain issues (Fine Furniture I and Fine Furniture II) for reconsideration by Commerce.
- On remand Commerce revised: (1) its deduction for irrecoverable Chinese VAT (using Fine Furniture’s transfer price to its affiliate Double F), (2) its selection of surrogate financial statements (choosing Mount Banahaw and Tagum), and (3) its surrogate value for electricity (retaining Camarines Sur industrial rates); Commerce recomputed Fine Furniture’s margin at 0.73% and applied it to separate-rate respondents.
- Fine Furniture agreed with the VAT and some financial-statement decisions but objected to Commerce’s exclusion of certain Philippine financial statements (Winlex, Mega Plywood) and contested the electricity surrogate, submitting National Power Corporation (NPC) monthly POR rates as superior.
- The court sustained Commerce’s remand redetermination as to the VAT deduction and selection of surrogate financial statements, sustained Commerce’s decision to apply Fine Furniture’s rate to separate-rate plaintiffs, but remanded the electricity surrogate for reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Deduction for irrecoverable Chinese VAT | VAT should be calculated on Fine Furniture’s transfer price to its affiliate (Double F) because VAT refund is based on that export price | Commerce’s original method used adjusted resale price; on remand Commerce used Fine Furniture’s certified transfer price | Court sustained Commerce’s remand decision using the transfer price to Double F to calculate irrecoverable VAT |
| Selection of surrogate financial statements | RPC, Winlex, and Mega Plywood should be used; Mount Banahaw is integrated and should be included; Winlex omission is minor; Mega Plywood could be adjusted for shareholder advances | Commerce excluded incomplete statements (RPC, PSP, Winlex, Mega Plywood) and used Tagum and Mount Banahaw as best available | Court sustained Commerce’s selection (use of Tagum and Mount Banahaw) and rejection of Winlex and Mega Plywood as supported by record evidence |
| Surrogate value for electricity | NPC monthly POR country/regional averages (4.1609 PHP/kWh POR average) are more contemporaneous, broader-market, and tax-exclusive; NPC is superior | Commerce preferred Camarines Sur industrial rates for specificity to industrial users despite uncertainty about tax exclusivity and limited geography | Court remanded: Commerce’s choice of Camarines Sur industrial rates is not supported as the best available information given lack of contemporaneity, limited representativeness, and record favoring a broader country-wide rate |
| Application of Fine Furniture’s margin to separate-rate respondents | Separate-rate plaintiffs should receive whatever rate Commerce determines for Fine Furniture | Commerce applied Fine Furniture’s remand margin to separate-rate respondents listed | Court sustained Commerce’s assignment of Fine Furniture’s margin to the Separate Rate Plaintiffs (with minor list omission to be corrected) |
Key Cases Cited
- Consol. Edison Co. v. NLRB, 305 U.S. 197 (agency-review substantial-evidence standard)
- Jacobi Carbons AB v. United States, 222 F. Supp. 3d 1159 (Ct. Int’l Trade 2017) (recent NME VAT and related issues referenced)
- Aristocraft of America, LLC v. United States, 269 F. Supp. 3d 1316 (Ct. Int’l Trade 2017) (discussing VAT/refund issues in agency practice)
- China Mfrs. Alliance, LLC v. United States, 205 F. Supp. 3d 1325 (Ct. Int’l Trade 2016) (addressing valuation and surrogate selection issues)