Slip Op. 04-53 UNITED STATES COURT of INTERNATIONAL TRADE BEFORE: SENIOR
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Slip Op. 04-53 UNITED STATES COURT OF INTERNATIONAL TRADE BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS ________________________________________ : LUOYANG BEARING CORP. (GROUP), : ZHEJIANG MACHINERY IMPORT & EXPORT : CORP., and CHINA NATIONAL MACHINERY : IMPORT & EXPORT CORPORATION, : : Plaintiffs, : : and : : WAFANGDIAN BEARING COMPANY, LTD., : : Plaintiff and : Defendant-Intervenor, : Consol. Court No. : 01-00036 v. : : UNITED STATES, : : Defendant, : : and : : THE TIMKEN COMPANY, : : Defendant-Intervenor : and Plaintiff. : ________________________________________: This consolidated action concerns the claims raised by plaintiffs, Luoyang Bearing Corp. (Group) (“Luoyang”), Zhejiang Machinery Import & Export Corp. (“ZMC”), and China National Machinery Import & Export Corporation (“CMC”), and plaintiff and defendant-intervenors, Wafangdian Bearing Company, Ltd. (“Wafangdian”) and The Timken Company (“Timken”), who move pursuant to USCIT R. 56.2 for judgment upon the agency record challenging the Department of Commerce, International Trade Administration’s (“Commerce”) final determination, entitled Final Results of 1998- 1999 Administrative Review, Partial Rescission of Review, and Determination Not To Revoke Order in Part on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China (“Final Results”), 66 Fed. Reg. 1,953 (Jan. 10, 2001), as amended by Amended Final Results of 1998-1999 Administrative Review and Determination To Revoke Order in Part on Consol. Court No. 01-00036 Page 2 Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China (“Amended Final Results”), 66 Fed. Reg. 11,562 (Feb. 26, 2001). Specifically, CMC and ZMC contend that Commerce improperly rejected a market economy price of imported steel for the production of People’s Republic of China (“PRC”) tapered roller bearings (“TRBs”) based upon a “reason to believe or suspect” that the price was subsidized. CMC further argues that Commerce erred in: (1) holding an ex parte meeting with counsel for Timken; (2) including employer welfare and provident fund expenses in the selling, general and administrative expenses (“SG&A”) ratio; and (3) adding ocean freight and insurance costs to the export price of Japanese steel to determine the surrogate value. Luoyang, Wafangdian and ZMC maintain that Commerce erred in: (1) rejecting ZMC’s input value for steel bought from a PRC supplier and paid for with PRC currency; (2) disregarding actual ocean freight charges paid in market economy currency to PRC freight forwarders rather than to the exporter; and (3) using aberrational data in calculating the surrogate value for wooden cases and the steel used to make rollers. Timken contends that: (1) Commerce improperly applied the PRC rate to all Premier Bearing & Equipment Ltd. (“Premier”) United States sales; (2) the administrative record does not support the use of other producers’ factors data to calculate Premier’s normal values; (3) the upward post-sale price adjustments to certain Wafangdian sales were unlawful; (4) Commerce failed to account for defective parts in calculating normal value for Wafangdian; and (5) Commerce acted contrary to law in revoking the order relating to Wafangdian imports. Held: China National’s 56.2 motion is denied. Luoyang’s 56.2 motion is granted in part and denied in part. Timken’s 56.2 motion is granted in part and denied in part. This case is remanded to Commerce to: (1)(a) further explain why the surrogate values it chose for wooden cases and the steel used to produce TRBs for Wafangdian constitute the “best available information,” and (b) address the aberrational record data that Luoyang, Wafangdian and ZMC point to; and (2) conduct the separate rates analysis with respect to Premier and apply the PRC rate to all of Premier’s United States sales if Commerce finds that Premier is not independent of government control. [China National’s motion is denied. Luoyang’s motion is granted in part and denied in part. Timken’s motion is granted in part and denied in part. Case remanded.] Consol. Court No. 01-00036 Page 3 Dated: May 18, 2004 Hume & Associates PC (Robert T. Hume) for Luoyang and ZMC, plaintiffs and Wafangdian, plaintiffs and defendant-intervenors. Venable, Baetjer, Howard & Civiletti, LLP (Lindsay B. Meyer and Kristin K. Woody) for CMC, plaintiff. Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Henry R. Felix); of counsel: John F. Koeppen, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for the United States, defendant. Stewart and Stewart (Terence P. Stewart, Wesley K. Caine and Amy A. Karpel) for Timken, defendant-intervenor and plaintiff. OPINION TSOUCALAS, Senior Judge: This consolidated action concerns the claims raised by plaintiffs, Luoyang Bearing Corp. (Group) (“Luoyang”), Zhejiang Machinery Import & Export Corp. (“ZMC”), and China National Machinery Import & Export Corporation (“CMC”), and plaintiff and defendant-intervenors, Wafangdian Bearing Company, Ltd. (“Wafangdian”) and The Timken Company (“Timken”), who move pursuant to USCIT R. 56.2 for judgment upon the agency record challenging the Department of Commerce, International Trade Administration’s (“Commerce”) final determination, entitled Final Results of 1998-1999 Administrative Review, Partial Rescission of Review, and Determination Not To Revoke Order in Part on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China (“Final Results”), 66 Fed. Reg. Consol. Court No. 01-00036 Page 4 1,953 (Jan. 10, 2001), as amended by Amended Final Results of 1998- 1999 Administrative Review and Determination To Revoke Order in Part on Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China (“Amended Final Results”), 66 Fed. Reg. 11,562 (Feb. 26, 2001). Specifically, CMC and ZMC contend that Commerce improperly rejected a market economy price of imported steel for the production of People’s Republic of China (“PRC”) tapered roller bearings (“TRBs”) based upon a “reason to believe” or suspect that the price was subsidized. CMC further argues that Commerce erred in: (1) holding an ex parte meeting with counsel for Timken; (2) including employer welfare and provident fund expenses in the selling, general and administrative expenses (“SG&A”) ratio; and (3) adding ocean freight and insurance costs to the export price of Japanese steel to determine the surrogate value. Luoyang, Wafangdian and ZMC maintain that Commerce erred in: (1) rejecting ZMC’s input value for steel bought from a PRC supplier and paid for with PRC currency; (2) disregarding actual ocean freight charges paid in market economy currency to PRC freight forwarders rather than to the exporter; and (3) using aberrational data in calculating the surrogate value for wooden cases and the steel used to make rollers. Consol. Court No. 01-00036 Page 5 Timken contends that: (1) Commerce improperly applied the PRC rate to all Premier Bearing & Equipment Ltd. (“Premier”) United States sales; (2) the administrative record does not support the use of other producers’ factors data to calculate Premier’s normal values; (3) the upward post-sale price adjustments to certain Wafangdian sales were unlawful; (4) Commerce failed to account for defective parts in calculating normal value for Wafangdian; and (5) Commerce acted contrary to law in revoking the order relating to Wafangdian imports. BACKGROUND This case concerns the antidumping duty order on TRBs and parts thereof, finished and unfinished (“subject merchandise”), from the PRC for the period of review covering June 1, 1998, through May 31, 1999 (“POR”).1 See Final Results, 66 Fed. Reg. at 1,953. In 1987, Commerce published an antidumping duty order on TRBs from the PRC. See Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People’s Republic of China, 52 Fed. Reg. 22,667 (June 15, 1987). 1 Since the administrative review at issue was initiated after December 31, 1994, the applicable law is the antidumping statute as amended by the Uruguay Round Agreements Act (“URAA”), Pub. L. No. 103-465, 108 Stat. 4809 (1994) (effective January 1, 1995). See Torrington Co. v. United States, 68 F.3d 1347, 1352 (Fed. Cir. 1995) (citing URAA § 291(a)(2), (b) (noting effective date of URAA amendments)). Consol. Court No. 01-00036 Page 6 Commerce initiated an administrative review of the subject merchandise on July 23, 1999. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 64 Fed. Reg. 41,075 (July 29, 1999). On July 7, 2000, Commerce published the preliminary results of the subject review. See Preliminary Results of 1998-1999 Administrative Review, Partial Recission of Review, and Notice of Intent to Revoke Order in Part for Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China (“Preliminary Results”), 65 Fed. Reg. 41,944. Commerce published the Final Results on January 10, 2001. See Final Results, 66 Fed. Reg. 1,953. The Issues and Decision Memo2 which accompanied the Final Results, is dated January 3, 2001. See Final Results, 66 Fed. Reg. at 1,954. Commerce later published the Amended Final Results on February 26, 2001. See Amended Final Results, 66 Fed. Reg. 11,562. JURISDICTION 2 The full title of this