                                       Slip Op. 02 - 77

 UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
                                    :
CARPENTER TECHNOLOGY CORP.,          :
                                    :
                        Plaintiff,   :
                                    :
                  v.                :
                                    :
THE UNITED STATES,                   :
                                    :
                        Defendant.   :
____________________________________:              Before: MUSGRAVE, JUDGE
____________________________________
                                     :             Consol. Court No. 00-09-00447
VIRAJ IMPOEXPO LTD.,                 :
                                     :
                        Plaintiff,   :
                                     :
                  v.                 :
                                     :
THE UNITED STATES                    :
                                     :
                        Defendant.   :
____________________________________:

[Antidumping duty review determination sustained in part, reversed and remanded in part.]


                                                                        Decided: July 30, 2002

      Collier Shannon Scott, PLLC, (Robin H. Gilbert), Washington, D.C., for the plaintiff
Carpenter Technology Corporation.

       Miller & Chevalier (Peter Koenig), Washington, D.C., for the plaintiff Viraj Impoexpo
Ltd.

      Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director,
Commercial Litigation Branch, Civil Division, United States Department of Justice (Lucius Lau,
Kenneth J. Guido), for defendant The United States; (of counsel: William G. Isasi, Esq., U.S.
Department of Commerce).
Consolidated Court No. 00-09-00447                                                        Page 2



                                           OPINION

       Carpenter Technology Corporation (“Carpenter”) and Viraj Impoexpo Ltd. (“Viraj”)

brought separate lawsuits to contest certain aspects of Stainless Steel Bar From India: Final

Results of Antidumping Duty Administrative Review and Initiation of Antidumping New Shipper

Review, 65 Fed. Reg. 48965 (Aug. 10, 2000) (“Final Results”).1 The Final Results utilize Viraj’s

reported data except for U.S. sales for which lacking corresponding third-country sales data, for

which the office of International Trade Administration, U.S. Department of Commerce

(“Commerce” or “the Department”) utilized “facts otherwise available” to determine the margin

of dumping. See 19 U.S.C. § 1677e. Carpenter contests Commerce’s reversal of its preliminary

determination that Viraj’s questionnaire responses warranted an adverse inference and also its

model matching methodology. Viraj contests Commerce’s resort to facts available and also its

choice thereof. Commerce contends the Final Results are correct.

                                          Background

       Viraj’s stainless steel bar entered the United States commerce subject to Antidumping

Duty Orders: Stainless Steel Bar from Brazil, India and Japan, 60 Fed. Reg. 9661 (Feb. 25,

1995). The Final Results cover the period February 1, 1998 through January 31, 1999 (“POR”)

and were initiated on March 29, 1999.2 Commerce sent to Viraj the department’s standard

questionnaire requesting inter alia information on the home market values of merchandise under

review. See PDoc 950. The questionnaire referred a respondent to an attached Appendix III,

       1
         The official public and confidential records are herein abbreviated “PDoc” and “CDoc”,
respectively.
       2
          64 Fed. Reg. 14860 (Mar. 29, 1999). The proceeding was later combined with a new
shipper review. See 64 Fed. Reg. 18601 (Apr. 15, 1999).
Consolidated Court No. 00-09-00447                                                            Page 3



which specified that hot rolled (“black”) stainless steel bars as well as cold rolled (“bright”) bars

were reportable.

       In its first response(s), dated June 3, 1999 and July 12, 1999, Viraj indicated that it had

not made home market sales of certain merchandise under review and therefore it was providing

only data on third country sales.      PDocs 978, 1267.      Specifically, in several places Viraj

indicated that it was reporting sales of bright bars as the only merchandise under review that had

been sold in the United States during the POR. Commerce therefore sent Viraj a supplemental

questionnaire on August 17, 1999 requesting confirmation that Viraj had reported all home

market sales of all merchandise under review as described in Appendix III of the initial

questionnaire. See PDoc 1062. On September 23, 1999, Viraj confirmed that it had properly

reported all sales of the merchandise under review in the United States, the home market, and

third country markets.     Viraj again stated that it was reporting “all sales of the subject

merchandise as the total stainless steel bright bars activity.” PDoc 1291.

       Not convinced, Commerce therefore issued a second supplemental questionnaire on

January 18, 2000. PDoc 1219. This instructed Viraj to “reconfirm that [it is] reporting all sales

of stainless steel bars (not just bright bars) . . . to the United States, the home market, and to

third countries” and set a deadline of February 1, 2000 for responding.              Id. (at Fr. 2)

(highlighting added).    On January 24, 2000, Viraj requested an extension of time, which

Commerce granted to February 8, 2000 with the caveat that in view of the pending deadline for

the preliminary determination, no further extension of time would be granted. PDocs 1232,

1238. Viraj submitted data disclosing home market sales of black bar on February 8 and 9, 2000

(PDocs 1287, 1289), however it submitted the narration for the data on February 14, 2000.
Consolidated Court No. 00-09-00447                                                               Page 4



Commerce rejected that submission as untimely and excluded it from the administrative record

on February 17, 2000. See PDoc 1552.

       On March 8, 2000, Commerce published the preliminary results sub nom. Stainless Steel

Bar From India; Preliminary Results of Antidumping Duty Administrative Review and New

Shipper Review and Partial Rescission of Administrative Review, 65 Fed. Reg. 12209 (Mar. 8,

2000). Commerce determined that because Viraj’s last response was not timely, it had not

responded to the best of its ability, it had therefore failed to cooperate, and it was therefore

necessary to assign a margin based on total adverse facts otherwise available.3 Id. at 12210. See

19 U.S.C. § 1677e. The preliminary margin was 21.02 percent.

       On April 28, 2000, Viraj filed comments on the preliminary results. PDoc 1379. Viraj

explained to Commerce that information provided by its counsel showed Commerce authorizing

other respondents to exclude sales of black bar, and it thought that such exception applied to it

because it had not sold black bar in the United States. Because the correspondence from

Commerce to other parties indicated that black bar was fundamentally different from bright bar,

       3
           According to the February 28, 2000 facts available memorandum:

                no description of any product characteristics was given; no answers to our
                questions about customer product codes, relationships, or channels of
                distribution were provided; no explanation of the invoicing system was
                offered; and no indication were [sic] given as to the basis for determining
                date and terms of payment. Furthermore, Viraj offered no explanation for
                why it did not provide credit expense data, variable cost of manufacturing
                data, or any selling expense information. Nor did Viraj provide any
                explanation as to why it did not provide a narrative response to questions
                regarding its policies relating to the use of discounts, rebates, and interest
                revenue.

PDoc 1329 at 4.
Consolidated Court No. 00-09-00447                                                            Page 5



Viraj explained that it concluded that black bar was not a “foreign like product” or “comparable”

to the only “subject merchandise” it had sold in the United States, i.e., bright bar. Viraj stated

that it had clearly explained in its earlier responses that it was only reporting sales of bright bar

and never intended to mislead Commerce. It also explained that the narrative response to its

second supplemental response was submitted after the deadline due to the short time available to

respond and the time pressures on the one person capable of compiling the information for the

response. Additionally, Viraj argued that even without the narrative the data were sufficiently

complete to enable comparison to U.S. sales. Id.

       In the final determination, Commerce again declined consideration of Viraj’s home

market data on the ground that the narrative response had not been submitted by the required

deadline. Nonetheless, Commerce determined that Viraj’s responses had been “due to confusion

and not lack of cooperation” and therefore reversed its earlier conclusion that the circumstances

warranted an adverse inference.      Commerce then determined that Viraj’s reported foreign-

market sales were sufficiently complete to serve as a basis for comparison to U.S. sales. It

grouped stainless steel bar by the physical characteristics of type (hot- or cold-rolled), grade, re-

melting process, final finish, and shape. Because Commerce determined that Viraj did not report

complete variable cost of manufacturing information, for size it “banded” the foreign market

sales based on whether bar was above or below 20 millimeters, in accordance with Viraj’s

reported cost of manufacturing information. Commerce then matched sales, and for unmatched

U.S. sales Commerce utilized as facts available the “all-others” rate of 12.45% established at the

original less than fair value (“LTFV”) investigation in 1994. See Stainless Steel Bar From India,
Consolidated Court No. 00-09-00447                                                                Page 6



59 Fed. Reg. 66915 (Comment 1) (Dec. 28, 1994). This resulted in a weighted-average margin

of dumping of 2.50 percent for Viraj during the POR. 65 Fed. Reg. at 48967-68 (Aug. 10, 2000).

                                            Discussion

       Jurisdiction over this matter is pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) via 28 U.S.C. §

1581(c). The standard of review is whether “any [contested] determination, finding or

conclusion” found by Commerce is “unsupported by substantial evidence on the record, or is

otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B). Substantial evidence is

“such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”

E.g., Mitsubishi Heavy Indus. v. United States, 275 F.3d 1056, 1060 (Fed. Cir. 2001) (quoting

Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938) via Universal Camera Corp. v. NLRB,

340 U.S. 474, 477 (1951)).

       In an administrative review of an antidumping duty order, Commerce is required to

determine the applicable antidumping duty margin, if any, for each entry of “subject

merchandise.” 19 U.S.C. § 1675(a)(2)(A). The margin is the difference between the “normal

value” (“NV”) and the “export price” (“EP”) or “constructed export price” (“CEP)” (as

applicable) of the subject merchandise.      19 U.S.C. § 1677b(a).        Subsection (1) of section

1677b(a) provides that the NV of such subject merchandise “shall” be a

              (B) Price
                  ....
                   (i) . . . at which the foreign like product is first sold (or in the absence
              of a sale, offered for sale) for consumption in the exporting country, in the
              usual commercial quantities and in the ordinary course of trade and, to the
              extent practicable, at the same level of trade as the [EP] or [CEP], or
                  (ii) in a case to which subparagraph (C) applies, the price at which the
              foreign like product is so sold (or offered for sale) for consumption in a
              country other than the exporting country or the United States, if—
Consolidated Court No. 00-09-00447                                                            Page 7



                          (I) such price is representative,
                          (II) the aggregate quantity (or, if quantity is not appropriate,
                      value) of the foreign like product sold by the exporter or producer
                      in such other country is 5 percent or more of the aggregate quantity
                      (or value) of the subject merchandise sold in the United States or
                      for export to the United States, and
                          (III) [Commerce] does not determine that the particular market
                      situation in such other country prevents a proper comparison with
                      the export price or constructed export price.

              (C) Third Country Sales
                  This subparagraph applies when—
                    (i) the foreign like product is not sold (or offered for sale) for
              consumption in the exporting country as described in subparagraph (B)(i),
                   (ii) [Commerce] determines that the aggregate quantity (or, if quantity
              is not appropriate, value) of the foreign like product sold in the exporting
              country is insufficient to permit a proper comparison with sales of the
              subject merchandise to the United States, or
                  (iii) the particular market situation in the exporting country does not
              permit a proper comparison with the [EP] or [CEP].

              For purposes of clause (ii), the aggregate quantity (or value) of the foreign
              like product sold in the exporting country shall normally be considered to
              be insufficient if such quantity (or value) is less than 5 percent of the
              aggregate quantity (or value) of sales of the subject merchandise to the
              United States.

19 U.S.C. § 1677b(a)(1). If necessary information is missing from the administrative record,

Commerce must make a determination on the basis of available information pursuant to 19

U.S.C. § 1677e, which provides in relevant part:

              (a) In general
                  If—
                      (1) necessary information is not available on the record, or
                      (2) an interested party or any other person—
                         ***
                      (B) fails to provide such information by the deadlines for
                      submission of the information or in the form and manner
                      requested, subject to subsections (c)(1) and (e) of section 1677m of
                      this title,
Consolidated Court No. 00-09-00447                                                            Page 8



               [Commerce] . . . shall, subject to section 1677m(d) of this title, use the
               facts otherwise available in reaching the applicable determination under
               this subtitle.

               (b) Adverse inferences

                   If the administering authority or the Commission (as the case may be)
               finds that an interested party has failed to cooperate by not acting to the
               best of its ability to comply with a request for information from the
               administering authority or the Commission, the administering authority or
               the Commission (as the case may be), in reaching the applicable
               determination under this subtitle, may use an inference that is adverse to
               the interests of that party in selecting from among the facts otherwise
               available. Such adverse inference may include reliance on information
               derived from--
                        (1) the petition,
                        (2) a final determination in the investigation under this subtitle,
                        (3) any previous review under section 1675 of this title or
                        determination under section 1675b of this title, or
                        (4) any other information placed on the record.

19 U.S.C. § 1677e. See also 19 C.F.R. §§ 351.221, 351.308 (2000).

                                                 I

       Carpenter contends the record lacks substantial evidence to support the determination

that Viraj had acted to the best of its ability. It argues that Viraj, having participated in prior

proceedings, was “well-acquainted” with departmental procedures and the contents of the

agency’s standard questionnaire, and it contends that Commerce violated departmental policy by

not considering the three factors it generally considers in determining whether to apply adverse

facts available: (1) the level of experience of the respondent in other investigations and orders;

(2) whether the respondent has control of the data at issue; and (3) the extent to which the

respondent may have benefitted from its own lack of cooperation. See Def.-Int.’s Br. at 19-26

(citing inter alia Stainless Steel Sheet and Strip Coils from Taiwan, 64 Fed. Reg. 30592 (June 8,
Consolidated Court No. 00-09-00447                                                          Page 9



1999) (final LTFV determination); Roller Chain Other Than Bicycle, From Japan, 62 Fed. Reg.

60472, 60477 (Nov. 10, 1997) (final review results); Certain Welded Carbon Steel Pipes and

Tubes from Thailand, 62 Fed. Reg. 53808, 53820-21 (Oct. 16, 1997) (final review results)).

Carpenter argues for remand and consideration in accordance with Commerce’s own policy.

       Assuming arguendo that the foregoing amounts to administrative policy, the Court can

discern nothing of record to justify remand for such consideration. The generic experience of a

respondent in prior proceedings offers little, if any, insight into its actions during a particular

proceeding. Nippon Steel Corp. v. United States, 25 CIT ___, ___, 146 F. Supp. 2d 835, 839

(2001). The second and third factors are predicated on finding a lack of cooperation. None has

been determined, and there is no indication that Viraj intended to or did benefit from

withholding information.     Moreover, 19 U.S.C. § 1677e(b) is permissive in scope. See

Hoogovens Steel BV v. United States, 24 CIT ___, ____, 86 F. Supp. 2d 1317, 1332 (2000).

Therefore, even if Viraj had not acted to the best of its ability the law does not compel an

adverse inference.

       Of course, clear communication is prerequisite to avoiding confusion. Cf. 19 U.S.C. §§

1677m(c) & 1677m(d). In this matter, Commerce sought the same information three times. But

the apparent need for the second supplemental questionnaire would have been obviated had

Commerce specifically requested confirmation in the first supplemental questionnaire of whether

Viraj had reported all home market sales including black bar. On the other hand, the fact that

Commerce sought confirmation at all (i.e., whether all home market sales had been reported)

should have acted as a red flag to Viraj regarding its reporting of home market sales.
Consolidated Court No. 00-09-00447                                                       Page 10



       The purposes of the antidumping laws are not furthered by erroneous assumption. Time

is a precious commodity in these administrative proceedings. If a request from Commerce is

unclear, it is incumbent upon parties to assist the administrative process and clarify the precise

information sought. See 19 U.S.C. §§ 1675(a)(3)(A) & 1675(c)(5); Atlantic Sugar, Ltd. v.

United States, 744 F.2d 1556, 1560 (Commerce is dependent upon the cooperation of

respondents to provide necessary information in order to determine dumping margins “within the

extremely short statutory deadlines which the Congress has built into the . . . antidumping law”);

Persico Pizzamiglio, S.A. v. United States, 18 CIT 299, 304 (1994) (“any ambiguity should have

been resolved through consultation with Commerce before the time . . . the response was due”);

Sugiyama Chain Co. v. United States, 16 CIT 526, 531, 797 F. Supp. 989, 994 (1992) (“if the

burden of compiling, checking, rechecking, and finding mistakes in [a] submission . . . were

placed upon Commerce, it would transform the administrative process into a futility”).

       In any event, the standard of review is whether there is substantial record evidence to

support the agency’s determination that Viraj had acted to the best of its ability. There is,

namely: (1) the letter from Commerce to counsel exempting Isibars from reporting black bar

sales, on which Viraj claims to have relied, (2) the generality of the first supplemental

questionnaire request, (3) Viraj’s reiteration of its original response that it was reporting “all

sales of the subject merchandise as the total stainless bright bars activity,”4 and (4) Viraj’s

general diligence and responsiveness to Commerce’s requests for information. See PDoc 1477

(Comment 4). See also PDocs 1219, 1379 at 2. Given the context, Commerce could reasonably

conclude that Viraj had been confused as to its reporting requirements, and that even considering

       4
           PDocs 1267, 1291 at 2.
Consolidated Court No. 00-09-00447                                                      Page 11



the late narrative Viraj had been responsive. The determination that Viraj had acted to the best

of its ability is therefore sustained. See Consolo v. Federal Maritime Comm’n, 383 U.S. 607,

620 (1966) (the possibility of drawing inconsistent conclusions from the same “evidence does

not prevent an agency’s finding from being supported by substantial evidence”); Inland Steel

Industries, Inc. v. United States, 188 F.3d 1349, 1359 (Fed. Cir. 1999) (reviewing courts do not

weigh the evidence to determine whether a different conclusion is possible).

                                               II

       Viraj spends much of its brief criticizing Commerce’s decision to reject the narrative as

untimely and disregard the home market data and base normal values (NVs) on third country

sales. At the same time, however, Viraj complains of being forced to respond to a six-page,

single-spaced document in a mere two weeks, albeit with a one-week extension. The second

supplemental questionnaire was a consequence of the nonspecific request in the first

supplemental questionnaire to confirm that all home market sales had been reported, which Viraj

contends was inadequate notice “of the nature of the deficiency” in accordance with 19 U.S.C. §

1677m(d), particularly in light of awareness of the exemption “granted” to other respondents

from reporting black bar sales in the home market on the ground that they had sold only bright

bar in the U.S. market. Viraj further contends that because its situation was the same as those

other respondents, in light of their exemptions the reporting requirement imposed on it was

arbitrary and capricious. Viraj’s Br. at 5.

       The judicial standard of review in a challenge such as this is whether the determination

on the record is unsupported by substantial evidence or not in accordance with law. See 19

U.S.C. § 1516a(b)(1)(B) (1995). Of course, an agency record that reveals an arbitrary or
Consolidated Court No. 00-09-00447                                                         Page 12



capricious decision would not be in accordance with law, but that inquiry is narrower than the

substantial evidence standard and asks whether there was a rational basis in fact for the decision.

Suwanee Steamship Co. v. United States, C.D. 4708, 79 Cust.Ct. 19, 23-24, 435 F.Supp. 389,

392 (1977). If so, a court may not substitute its judgment for that of the agency. Motor Vehicle

Mfrs. Ass'n of U.S. v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43 (1983). See, e.g.,

Melamine Chemicals, Inc. v. United States, 732 F.2d 924, 933-34 (1984) (“Commerce's decision

to disregard margins caused solely by temporary fluctuations in the exchange rate, and to reach a

Final Negative Determination, was reasonable and neither arbitrary nor in violation of law.”);

Bowe Passat v. United States, 17 CIT 335, 338 (1993) (decision to reject supplemental

information arbitrary and capricious and an abuse of discretion). See also 5 U.S.C. § 706(2)(A).

       As a general matter “it is Commerce, not the respondent, that determines what

information is to be provided for an administrative review.” Ansaldo Componenti, S.p.A. v.

United States, 10 C.I.T. 28, 37, 628 F. Supp. 198, 205 (1986).              The government here

distinguishes Commerce’s treatment of Viraj on the ground that those other respondents

specifically requested an exemption whereas Viraj did not. But, of course, Commerce may

neither abrogate its statutory mandate to inquire into all matters that may bear on the margin

calculation nor engage in partiality. By exempting respondents with no sales of black bar in the

United States from reporting home market sales of such, Commerce obviously concluded that

home market black bar information was not necessary for calculating their NVs in accordance

with 19 U.S.C. § 1677b(a)(1). Whether that decision was correct, Commerce was aware that

Viraj had sold only bright bar in the U.S. market, and that circumstance necessarily superseded

the mandate to use facts otherwise available “if an interested party or any other person . . . fails
Consolidated Court No. 00-09-00447                                                           Page 13



to provide such information by the deadlines for submission of the information or in the form

and manner requested” under 19 U.S.C. § 1677e(a)(2)(B). Respondents have a right to expect

fair, impartial, and consistent treatment in agency proceedings. See, e.g., NEC Corp. v. U.S.

Dep’t of Commerce, 151 F.3d 1361 (1998); Melamine Chemicals v. United States, 732 F.3d 924,

933 (1984); Torrington Co. v. United States, 44 F.3d 1572, 1579 (1995). It was incumbent upon

Commerce to apply its rationale to all respondents similarly situated.

       Be that as it may, in view of the fact that Viraj limited its initial response to third country

sales data at the outset of the proceeding, it appears that Viraj’s fundamental concern is the

margin calculated on the basis of facts otherwise available, and that the basis of market data used

to calculate NV is immaterial to Viraj. The foregoing therefore appears to be academic.

                                                  III

       A margin determination requires the identification of the “foreign like product” used for

purposes of comparison.      See 19 U.S.C. § 1677(16).        In comparing the foreign and U.S.

merchandise, if a difference in price is “established to the satisfaction of the administering

authority to be wholly or partly due to . . . other differences in the circumstances of sale[,]” 19

U.S.C. § 1677b(a)(6)(C) authorizes Commerce to make a so-called difference in merchandise

(“difmer”) adjustment.     In considering any such adjustment, Commerce proceeds on the

assumption that variable costs of manufacturing account for all differences in the physical

characteristics of the products to be compared:

               In deciding what is a reasonable allowance for differences in physical
               characteristics, the Secretary will consider only differences in variable
               costs associated with the physical differences. Where appropriate, the
               Secretary may also consider differences in the market value. The
Consolidated Court No. 00-09-00447                                                       Page 14



               Secretary will not consider differences in cost of production when
               compared merchandise has identical physical characteristics.

19 C.F.R. § 351.411 (1998).       If the value of the difmer exceeds 20 percent of the total

manufacturing costs (variable plus fixed costs), Commerce will presume that products are not

comparable in the absence of circumstances that would make such difference reasonable. See

Antidumping Manual, Ch. 8 at 49-52 (U.S. Dep’t of Comm., Feb. 10, 1998); see also Import

Administration Policy Bulletin 92.2 (U.S. Dep’t of Comm., July 29, 1992).

       Commerce concluded that Viraj provided total cost of manufacturing data but incomplete

variable cost of manufacturing (“VCOM”) data. Commerce therefore determined to resort to

facts otherwise available for such VCOM data, and its method of accounting for such was to

“band” (to use the parties’ term) foreign-market and U.S.-export sales based on Viraj’s

representation that production processes differed between bar of less than 20 millimeters and bar

greater than 20 millimeters. See CDoc 1266 at D-3; CDoc 1290 at D-14.

       Carpenter believes size matters. It argues that there is a fundamental difference between

banding sales and banding manufacturing costs, and that without VCOM data, third-country and

U.S. sales could not be properly matched. The effect of the methodology, Carpenter contends,

was to assign identical product matches irrespective of actual bar size:

               In cases where the Department has allowed averaging of cost data for
               VCOM, that decision only determined the magnitude of the DIFMER
               when a match between non-identical U.S. and foreign products occurs.
               Banding sales together by size range actually changes the manner by
               which sales are matched. Instead of seeking to match 15 mm prices in the
               U.S. to 15 mm prices in the third-country market, the Department has
               allowed a 15 mm product in the United States to match a 5, 8, 12, 16, or
               19 mm product in the foreign market. Thus, the specific price differences
               are obviated and the most accurate possible measure of dumping is
               masked.
Consolidated Court No. 00-09-00447                                                           Page 15



Def.-Int.’s Reply Br. at 7, 11. Thus, according to Carpenter, Commerce’s method had the effect

of masking differences in Viraj’s cost of production and “rewarding” Viraj because Commerce

could not make the requisite difmer adjustments.

       The government responds that the question here is simply whether Commerce has

reasonably met the requirements of 19 U.S.C. § 1677b(a)(6)(C) to account for the absence of

VCOM information. It contends that Carpenter’s argument assumes that Commerce’s method is

distorted without evidence thereof. Rather, according to the government, the data Viraj supplied

enabled calculation of all legally-mandated adjustments to NV under 19 U.S.C. § 1677b(a)(6)

(e.g., inland freight, insurance, brokerage) and accounted for five out of the six physical

characteristics that Commerce customarily uses in matching these products (type, grade, re-

melting process, final finish, and shape).      Def.’s Br. at 33.     See CDoc 1266 at B8–B10.

According to the government, the lack of precise VCOM information affected only the

comparability of size, which impacted the “customary” adjustment for “any other differences.”

See 19 U.S.C. § 167b(a)(6)(C)(ii).

       Commerce has implicit authority to develop and apply reasonable model-matching

methodologies in order to determine a relevant “foreign like product” under 19 U.S.C. §§ 1677b

and 1677(16), and its statutory interpretation thereof is entitled to Chevron deference.5 See, e.g.,

NTN Bearing Corp. v. United States, 26 CIT ___, ___, 186 F. Supp. 2d 1257, 1302 (2002). See

also Koyo Seiko Co. v. United States, 66 F.3d 1204, 1209-10 (Fed. Cir. 1995) (“Congress has

implicitly delegated authority to Commerce to determine and apply a model-match methodology

       5
          See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837,
842-43 (1984) (“if the statute is silent or ambiguous with respect to the specific issue, the question
for the court is whether the agency's answer is based on a permissible construction of the statute”).
Consolidated Court No. 00-09-00447                                                         Page 16



necessary to yield ‘such or similar’ merchandise”); Timken v. United States, 10 CIT 86, 98, 630

F. Supp. 1327, 1338 (1986). On the other hand, the methodology chosen must comport with law

and the standards of substantial evidence and reasonableness. See 19 U.S.C. § 1516a; see, e.g.,

Allied Tube & Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 1096 (CIT 2001) (rejecting

Commerce's unreasoned reliance on simple average in lieu of more accurate weighted average in

non-adverse facts available context); Mannesmannrohren-Werke AG et al. v. United States, 24

CIT ___, ___, 120 F. Supp. 2d 1075, 1088-89 (2000) (Commerce’s use of average facts available

methodology upheld in absence of evidence that a more specific methodology would be more

accurate); Koenig & Bauer-Albert AG, et al. v. United States, 22 CIT 574, 581-584, 15 F. Supp.

2d 834, 844-46 (1998) (Commerce’s use of a facts otherwise available methodology upheld

because the methodology bore a rational relationship to the subject matter at issue), aff’d in part,

rev’d on other grounds, 259 F.3d 1341 (Fed. Cir. 2001); Federal-Mogul Corp. et al. v. United

States, 18 CIT 785, 807-808, 862, F. Supp. 384, 400 (1994) (Commerce has discretion in the

choice of methodology as long as the chosen methodology is reasonable and its conclusions are

supported by substantial evidence on the record).

       Carpenter’s analysis demonstrates that Commerce’s method matched more sales than

would have been the result had resort to facts otherwise available occurred after a determination

on model matching, but that analysis does not, in itself, demonstrate that Commerce’s method

was unreasonable and not in accordance with law. As above noted, a difmer adjustment is

required to the extent that a difference in price is “established to the satisfaction of the

administering authority to be wholly or partly due to . . . other differences in the circumstances

of sale[.]” 19 U.S.C. § 1677b(a)(6)(C) (highlighting added). Carpenter’s argument does not
Consolidated Court No. 00-09-00447                                                         Page 17



effectively demonstrate that differences in VCOMs (assuming they exist) among the different

individual sizes of stainless steel bar were of such magnitude that they would exceed the difmer

test’s twenty percent allowance before incomparability is presumed. In other words, Carpenter’s

argument does not demonstrate that Commerce’s method of accounting for the absence of

VCOM information for matching purposes was per se unreasonable and therefore not in

accordance with law. Cf. Koyo Seiko, supra, 66 F.3d at 1208-11 (sum-of-deviations without ten

percent cap model matching methodology sustained); Makita Corp. v. United States, 21 CIT

734, 974 F. Supp. 770, 779 (1997) (Commerce has authority to pool home market merchandise

for matching purposes); Federal-Mogul Corp. v. United States, 20 C.I.T. 234, 248-49, 918 F.

Supp. 386, 400 (1996); Torrington Co. v. United States, 19 CIT 403, 414, 881 F. Supp. 622, 635

(1995) (sustaining family model matching methodology); Hussey Copper, Ltd. v. United States,

17 CIT 993, 996, 834 F. Supp. 413, 417-18 (1993) (division of alloys into groups, difmer

adjustments based on London Metal Exchange prices of copper and zinc for each grade within

each group, and derivation of weighted-average group price as the basis for comparison, held to

be in accordance with 19 U.S.C. 1677(16); exact alloy matching not required by statute).

       On the other hand, Carpenter points out that the issues and decision memorandum states

that Commerce undertook banding “in order to obtain more identical matches.” PDoc 1466 at 13.

This explanation appears results-oriented. In Hyster Co. v. United States, 18 CIT 119, 127, 848

F. Supp. 178, 185-86 (1994), the court examined seemingly similar statements of Commerce6


       6
         See Hyster, 18 CIT at 127, 848 F. Supp. at 185-86 (“Our main concern is that we find the
most similar merchandise that is sold in commercial quantities in the home market[.] This approach
appears to be a reasonable solution in that it simplifies the matching process and creates the
likelihood of a greater number of matches”) .
Consolidated Court No. 00-09-00447                                                          Page 18



relating to an announced change in matching methodology but concluded that there were other

factors putting those statements into perspective and were not the justification for the change in

Commerce’s model matching methodology. While an agency determination might be sustained

despite “less than ideal clarity if the agency’s path may be reasonably discerned[,]” Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974), the “path” here is

cluttered by apparent disparate treatment between Viraj and Panchmahal, the latter, as Carpenter

points out, having been required to provide for matching purposes cost data in range form and

specific product sizes but penalized for not providing cost information to enable exact-size

product matching. See Def.-Int.’s Br. at 11-12 (citing PDoc 1466 at 2-7 & CDoc. 1284). This

Court therefore cannot conclude that the Final Results do not reflect a desire to produce a

particular result, and the matter requires remand for clarification and, as necessary, reconcilation.

                                                 IV

       Under prior law, when considering a non-adverse (or “second tier”) facts otherwise

available situation, Commerce would ordinarily use the higher of the original LTFV margin

determined for the respondent’s merchandise or the highest calculated margin during the review

at issue for the same class or kind of merchandise. See, e.g., Koyo Seiko Co. v. United States, 92

F.3d 1162, 1167 (Fed. Cir. 1996). In this proceeding, because Viraj was not a party to the

original LTFV investigation, Commerce utilized as non-adverse facts otherwise available the

LTFV all-others rate, a weighted-average of a verified margin of 3.87% found for Grand

Foundry, a cooperative respondent, and a derived margin based on the petitioner’s allegations of

21.02% determined against Mukand, an uncooperative respondent. Because that rate was based
Consolidated Court No. 00-09-00447                                                             Page 19



on adverse inferences, Viraj argues that its use impermissibly perpetuated pre-URAA law7 and

violated an international obligation of the United States.8

       The government essentially argues that the URAA requires only prospective

determination of non-adverse all-others rates, a position it contends is in accordance with

judicial precedent that all-others rates are valid and unalterable until such time as they are

specifically invalidated. Def’s Br. at 23 (citing Federal-Mogul Corp. et al. v. United States, 17

CIT 442, 449, 822 F. Supp. 782, 788 (1993); Federal-Mogul Corp. et al. v. United States, 18

       7
         The underlying LTFV investigation was initiated on January 27, 1994 and decided on
December 28, 1994. See 59 Fed.Reg. 3844 and 59 Fed.Reg. 66915. On January 1, 1995 section
219(b)(2) of the URAA went into effect:

               For purposes of preliminary and final LTFV determinations the estimated all-
               others rate shall be an amount equal to the weighted average of the estimated
               weighted average dumping margins established for exporters and producers
               individually investigated, excluding any zero and de minimis margins, and
               any margins determined entirely under section 1677e of this title.

19 U.S.C. § 1673d(c)(5)(A). See 19 U.S.C. § 1677e.
       8
          Viraj’s Br. at 3 (citing Federal Mogul Corp. v. United States, 93 F.3d 1572, 1581 (Fed. Cir.
1995) (“[S]tatutes should not be interpreted to conflict with international obligations.”)). Viraj notes
that the URAA sought to bring U.S. law into compliance with the United States’ WTO obligations,
including the provision on permissible all-others rates. See Ferro Union Inc. v. United States, 23
CIT 178, 197, 44 F. Supp. 2d 1310, 1328 (1999). Article 9.4 of the WTO Antidumping Duty
Agreement, reflected in 19 U.S.C. § 1673d(c)(5)(A), states that

               any antidumping duty applied to imports from exporters or producers not
               included in the examination [i.e. an all-others rate] shall not exceed the
               weighted average dumping margin with respect to the selected exporters or
               producers. . . . Provided that the authorities shall disregard for purposes of
               this paragraph any zero and de minimis margins established under the
               circumstances referred to in paragraph 8 or Article 6[, i.e., margins based on
               adverse-inference facts otherwise available].

See, e.g., United States Antidumping Measures on Certain Hot-Rolled Steel Products from Japan,
WTO Panel Report WT/DS184/R (Feb. 28, 2001).
Consolidated Court No. 00-09-00447                                                       Page 20



CIT 785, 801, 862 F. Supp. 384, 400 (1994)). See also D&L Supply Co. v. United States, 113

F.3d 1220, 1223 (Fed. Cir. 1997); Pulton Chain Co. v. United States, 21 CIT 1290, 1292 (1997).

Pre-URAA all-others rates have not been invalidated and are valid record information for use as

facts available, the government argues (irrespective of any adverse-inference basis), since

decisions of this Court (according to the government) regard all-others rates as non-adverse in

the context of unreviewed exporters. Def.’s Br. at 23 (citing The Coalition for the Preservation

of American Brake Drum and Rotor Aftermarket Manufacturers v. United States, 23 CIT 88,

112, 44 F. Supp. 2d 229, 252 (1999); Borden Inc. v. United States, 22 CIT 233, 265, 4 F. Supp.

2d 1221, 1247 (1996) (if Commerce does not draw an adverse inference, it may apply a lower

rate, including an all-others rate)). Therefore, the government argues, it is logical to regard a

pre-URAA all-others rate as non-adverse for purposes of facts otherwise available. Further,

according to the government, all-others rates conform to the “common sense inference” that the

margins determined at the LTFV investigation are the most indicative of current market

conditions,9 whereas taking Viraj’s argument to its logical extreme “would prevent the

application of the all-others rate against non-reviewed exporters.” Def.’s Br. at 22.

       However, American Brake and Drum and Borden each considered the application of an

all-others rate that had been determined after the URAA took effect. They do not provide

guidance on the applicability of a pre-URAA rate based on adverse inferences to a cooperative

respondent reviewed post-URAA. Likewise, Allied Signal interpreted Commerce’s permissible

presumption under pre-URAA law and is not dispositive.         Commerce has authority to select

       9
           Allied Signal v. United States, 996 F.2d at 1192. Commerce further states such
presumption might have been overcome had Viraj simply provided the requested information within
the deadlines established. Rhone Poulenc, Inc. v. United States, 899 F.2d 1185 (Fed. Cir. 1990).
Consolidated Court No. 00-09-00447                                                         Page 21



from among any “information or inferences which are reasonable under the circumstances as

facts otherwise available for a cooperative respondent[.]”10 But, the authority to utilize “any

other information placed on the record”11 as adverse facts otherwise available is restricted to

respondents deemed uncooperative in accordance with 19 U.S.C. § 1677e(b), which Viraj was

not. Post-URAA, it appears Commerce must, by definition, presume non-adversity in the case of

a cooperative respondent, and the Court therefore concludes that an all-others rate based in

whole or in part on adverse inferences cannot be said to constitute “non-adverse” facts otherwise

available. The all-others rate was therefore an inappropriate choice of facts otherwise available

and the matter will be remanded for further consideration.12

       10
           Statement of Administrative Action, H.R.Rep. No. 103-826(I) 656, 869 (“SAA”),
reprinted in 1994 U.S.C.C.A.N. 4040, 4198.
       11
            19 U.S.C. § 1677e(b)(4).
       12
          Considering what would be appropriate facts otherwise available, there must be “a rational
relationship between data chosen and the matter to which they are to apply.” Manifattura Emmepi
S.p.A. v. United States, 16 CIT 619, 624, 799 F. Supp. 110, 115 (1992). See also National Steel
Corp. v. United States, 18 CIT 1126, 1132, 870 F. Supp. 1130, 1136 (1994). On that basis, the 1994
Grand Foundry rate would be a tenuous fit as facts otherwise available. Viraj argues that the zero
percent margin determined against it in 1997 is more probative of its current market conditions than
other information of record, and it contends that where Commerce is unable to calculate a margin
for certain sales of a cooperative respondent, it has used as facts otherwise available a weighted-
average margin based on acceptable sales from the respondent’s own database. Viraj’s Br. at 4
(citing Static Random Access Memory From Taiwan, 63 Fed. Reg. 8909, 8920 (Feb. 23, 1998)
(“SRAM”)). The government argues that SRAM was merely the initial LTFV investigation and thus
“there was no higher rate from an earlier initial LTFV determination available for use.” Def.’s Br.
at 20. The Court fails to see the distinction. Rummaging among facts available for a “high” margin
to use for a cooperative respondent would be prima facie results-oriented and in derogation of
Manifattura’s rational relationship test if such is not probative. Cf. Rhone Poulenc, Inc. v. United
States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) (rejecting low margin information for demonstrably
less probative high margin information would be punitive BIA). Commerce may use a cooperative
respondent’s own data if appropriate to do so. See, e.g., Nippon Steel v. United States, 25 CIT ___,
n.6, 146 F. Supp. 2d 835, n.6 (2001); Mannesmannrohren-Werke AG v. United States, 24 CIT ___,
___, 120 F. Supp. 2d 1075, 1080-1081, 1088-89 (2000).
Consolidated Court No. 00-09-00447                                                     Page 22



                                         Conclusion

       In view of the foregoing, this matter will be remanded to Commerce for further

proceedings not inconsistent with this opinion.       Commerce shall have 60 days for re-

determination, the parties shall have 30 days from the date thereof for commenting thereon, and

15 days thereafter for replies.




                                              ________________________________________
                                                    R. KENTON MUSGRAVE, JUDGE

Dated: July 30, 2002
       New York, New York
