                          Slip Op. 00 - 63

            UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - -x
BETHLEHEM STEEL CORPORATION, INLAND
STEEL COMPANY, INC., and U.S. STEEL :
GROUP A UNIT OF USX CORPORATION,
                                    :
                         Plaintiffs,
                                    :
                 v.
                                    :
UNITED STATES,                         Court No. 96-05-01313
                                    :
                         Defendant,
                                    :
               -and-
                                    :
ALGOMA STEEL INC., GERDAU MRM STEEL
and STELCO, INC.,                   :

               Intervenor-Defendants.:
- - - - - - - - - - - - - - - - - - -x

                        Memorandum & Order

[Plaintiffs' motion for judgment on agency
 record granted in part and denied in part;
 remanded to International Trade Administration.]

                                         Decided:   June 2, 2000

     Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Light-
hizer, John J. Mangan, Ellen J. Schneider and James C. Hecht) for
the plaintiffs.

     David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, and Velta A. Melnbrencis, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice; and Office of Chief Counsel for Import Administration, U.S.
Department of Commerce (Linda A. Andros and Jeffrey C. Lowe), of
counsel, for the defendant.

     Hogan & Hartson L.L.P. (Mark S. McConnell, Richard L. A. Weiner
and Roger P. Alford) for intervenor-defendant Algoma Steel Inc.

     Ross & Hardies (Peter A. Martin) for intervenor-defendant
Gerdau MRM Steel.
Court No. 96-05-01313                                   Page 2


     Willkie Farr & Gallagher (Christopher A. Dunn, Daniel L. Por-ter
and Jacqueline A. Weisman) for intervenor-defendant Stelco, Inc.
Court No. 96-05-01313                                      Page 3


         AQUILINO, Judge:    Pursuant to CIT Rule 56.2, the plain-

tiffs have interposed a motion for judgment upon the record com-piled

by the International Trade Administration, U.S. Department of Com-

merce ("ITA") sub nom. Certain Corrosion-Resistant Carbon Steel Flat

Products and Certain Cut-to-Length Carbon Steel Plate From Canada;

Final Results of Antidumping Duty Administrative     Reviews, 61

Fed.Reg. 13,815 (March 28, 1996). Those Final Results include margins

of dumping both kinds of steel by Stelco, Inc.     of 0.19 and 0.92

percent, respectively, as well as 1.82 and 0.02 percent for cut-to-

length plate from Algoma Steel Inc. and Mani-toba Rolling Mills,

respectively.1   The plaintiffs, the petition of which led to the

underlying antidumping-duty order, contest the Results with regard to

the cut-to-length steel plate2 on the specified grounds that the ITA

erred in (a) accepting after veri- fication an unverified change in

the unit value of Algoma scrap; (b) accepting costs reported for less

than all of that company's facilities which produced the steel under

review; (c) accepting incorrect price adjustments for Stelco


    1 See 61 Fed.Reg. at 13,833. Each of these companies has
intervened herein as a party defendant, the last sub nom. Gerdau MRM
Steel, which will be referred to hereinafter by the acronym in the
record, MRM.
    2 Issues focusing on the corrosion-resistant carbon steel flat
products are discussed sub nom. AK Steel Corp. v. United States, 21
CIT 1204 (1997), remand results aff'd, 22 CIT    , Slip Op. 98-106
(July 23, 1998).
Court No. 96-05-01313                                    Page 4


products; (d) accepting    unsupported MRM rebates; (e) accepting

partial-year information
Court No. 96-05-01313                                      Page 5


as to MRM general-and-administrative expenses in calculating cost of

production and constructing value; (f) accepting unsupported claimed

credit expenses for that company; and (g) relying on a ministerial

error in calculating margin(s) for Algoma.


          The defendant responds that this case should be remanded

to the ITA to

    (1) correct a ministerial error in Commerce's model match
    program for Algoma Steel . . . and (2) to re-consider the
    adjustment made for the credit expenses for . . . MRM[].
    Plaintiffs' motion, however, should be denied in all other
    respects . . ..


Defendant's Memorandum, p. 1.   Counsel for the first-named inter-v-

enor do

    not oppose a remand by this Court to the Department for
    the sole and limited purpose of correcting the ministerial
    error with instructions for the Depart- ment to take full
    account of the accuracy of corrections to the computer
    programming code.


Brief of Algoma Steel Inc., pp. 30-31.   On its part, MRM takes the

position that none of plaintiffs' points, including that

with regard to its credit expenses, merits any judicial relief.

Stelco, Inc. also argues that the agency's Final Results should be

affirmed in their entirety.


                                I
Court No. 96-05-01313                                       Page 6


         Jurisdiction to decide plaintiffs' motion is pursuant to

28 U.S.C. §1581(c).     And the standard for review of the con-tested

ITA determination is whether it is unsupported by substantial

evidence on the record or otherwise not in accordance with law.3

                                 A

         For the merchandise at issue, the record reflects three

stages of production at Algoma Steel, denominated as slab, roll-ing,

shearing, during each of which scrap resulted.     The company

determined the amount and cost thereof at each stage and reported it

as a cost of production and also, because the scrap was either sold

or remelted, reported a scrap-revenue amount.


         During the process of ITA verification of the data

provided, Algoma notified the agency that it had discovered a "minor"

clerical error in the calculation of yield loss4 at one of its

shearing lines, and it submitted a "corrections memorandum", which

the ITA determined to accept.     See 61 Fed.Reg. at   13,818.   The



    3 19 U.S.C. §1516a(b)(1)(B) (1994). As noted in AK Steel Corp.
v. United States, supra, amendments to this governing Title 19,
U.S.C. effectuated by the Uruguay Round Agreements Act, Pub. L. No.
103-465, 108 Stat. 4809 (1994), do not apply to adminis-trative
reviews commenced before January 1, 1995, which is the case here.
See 21 CIT at 1205 n. 1, citing Torrington Co. v. United States, 68
F.3d 1347, 1352 (Fed.Cir. 1995).
    4 See Record Document ("R.Doc") 421, p. 1. See also Confi-
dential Record Document ("ConfDoc") 204, first page.
Court No. 96-05-01313                                        Page 7


agency did so, having verified the existence of the error and also

having recognized that, as a result of its cor-rection, not only the

yield-loss factor changed, scrap revenue did as well.       See id.; Brief

for Algoma Steel Inc., Exhibit 1.

         The plaintiffs point out that this revision was produced

several months after the deadline for submission of fact- ual

information specified in 19 C.F.R. §353.31(a)(1)(ii) (1994).          The

ITA concluded, however, that the submission was based upon the error

detected during verification and that the correction       in scrap

revenue was not new information received in contravention of the

foregoing regulation.    See 61 Fed.Reg. at 13,818.     The court concurs;

that is, its receipt was in accordance with law.


         As for plaintiffs' position that the correction is not

supported by substantial evidence, the record shows the yield-loss

percentage at the shearing stage to be a known figure, as are the

numbers for the volume and the value of Algoma's production of

sheared steel plate.    Dividing that volume by that per-centage gives

a figure for the volume of steel entering that stage.       That is, that

resultant number was derived; it was not otherwise determined in the

regular course of Algoma's process    of manufacture.     Hence, when the

percentage for yield loss was found during agency verification to be

too high, its downward adjustment necessarily increased the figure
Court No. 96-05-01313                                     Page 8


for the volume of unshorn plate and thus also for the cost thereof.

Since the volume and value of the finished product were known and

veri-fied, the net effect of the yield-loss percentage correction

was to increase the scrap-revenue number.



         The plaintiffs complain that, "if only the total ton-nage

of scrap changes (and not the unit value of scrap) then, as a matter

of simple arithmetic, the rate of change of total scrap revenue

should be identical" to the rate of change in total ton-age of scrap.

Plaintiffs' Brief, p. 15, n. 25.    However, the cor- rected yield-loss

percentage changed both total tonnage of scrap and its unit value.

When the yield-loss percentage decreased, the total amount of steel

entering the shearing stage and total costs at that stage increased.

Therefore, the scrap-revenue amount had to increase by the same

amount as the cost of the ad- ditional steel.    The unit value of

scrap is derived by dividing    the scrap-revenue amount by the total

volume of sheared plate.   Since that volume of sheared plate was

fixed, the unit value of scrap also had to increase.    In sum, the

record evidence supports the ITA's acceptance of Algoma's correction.


                                B

         The plaintiffs allege that the ITA erred in accepting

Algoma's costs as reported.    That is, the company produced sub-ject

merchandise on two mills, a 166-inch plate mill and a 106-inch strip
Court No. 96-05-01313                                       Page 9


mill, but the former rolled a greater percentage of cut-to-length

steel plate than the strip mill. Algoma calculated cost of production

on a process basis in which the monthly opera- tional costs were

recorded for each mill without allocation to specific products.      See

R.Doc 306, p. 17.

            During its administrative review, the ITA requested that

Algoma allocate costs on the basis of the different widths and gauges

of steel.    In doing so, the company

      started with total rolling costs for each mill for each
      time period. Dividing that number by the tons produced by
      the mill during the period yielded average rolling costs
      per ton. Algoma then attributed rolling costs to
      individual widths and gauges based on the average cost,
      adjusted to reflect mill productivity in producing dif-
      ferent widths and gauges.

Brief of Algoma Steel Inc., p. 16.      The plaintiffs do not object to

this particular methodology, rather to Algoma's reliance on plate-

mill costs for those of the strip mill.      As explained by the company,

the

      Strip Mill produces non-subject merchandise almost
      exclusively . . .. The only Strip Mill cost recorded in
      Algoma's records, however, is overall cost of Strip Mill
      operations for a time period, which is determined almost
      entirely . . . by the cost of rolling merchandise that is
      not subject to the investigation. There exists no
      separate record for the cost of rolling sub-ject
      merchandise on the Strip Mill -- there simply are no
      "actual" costs for rolling of plate on the Strip Mill.
      Instead, this number had to be developed by allocation.
      Algoma had two options in this respect: either Algoma
      could assign a cost that is drawn from Strip Mill
Court No. 96-05-01313                                     Page 10


    experience, but reflects almost entirely non-subject
    merchandise, or Algoma could assign a cost that reflects
    the cost of subject merchandise as it is rolled on the
    Plate Mill, assigning that cost to all plate irrespective
    of whether the plate was produced on the Plate Mill or
    the Strip Mill.


Id. at 16-17 (emphasis in original).    Nonetheless, the plaintiffs

contend that, since the company was able to report actual costs, the

ITA should be required to apply to the strip mill the best

information otherwise available or "BIA", which was defined at the

time to include the factual information submitted in support of the

petition.    19 C.F.R. § 353.37(b) (1994).


            Certainly, the ITA has a duty to make determinations    as

accurately as possible.    E.g., NTN Bearing Corp. v. United States, 74

F.3d 1204, 1208 (Fed.Cir. 1995); Rhone Poulenc, Inc. v. United

States, 899 F.2d 1185, 1191 (Fed.Cir. 1990).    And parties should

provide the information requested in an accurate and timely manner.

See, e.g., Societe Nouvelle de Roulements v. United States, 19 CIT

1362, 1368, 910 F.Supp. 689, 694 (1995); Yamaha Motor Co. v. United

States, 19 CIT 1349, 1359, 910 F.Supp. 679, 687 (1995).    Indeed,

failure to do so resulted in resort to best information otherwise

available per 19 U.S.C. §1677e and 19 C.F.R. §353.37 (1994).       E.g.,

Union Camp Corp. v. United States, 20 CIT 931, 938-39, 941 F.Supp.

108, 115 (1996), and cases cited therein.    Moreover, the agency, not
Court No. 96-05-01313                                    Page 11


a party under review, is responsible for deciding what information is

needed.   See, e.g., Olympic Adhesives, Inc. v. United States, 899

F.2d 1565, 1572 (Fed.Cir. 1990); Comitex Knitters, Ltd. v. United

States, 16 CIT 817, 821, 803 F.Supp. 410, 414 (1992).


          Historically, "Congress has granted Commerce consider-able

latitude in determining cost of production."5   There was no

requirement that actual costs be used or that a particular meth-

odology be followed.    Rather, the agency had discretion to choose

between "reasonable alternatives".    Technoimportexport, UCF Amer-ica

Inc. v. United States, 16 CIT 13, 18, 783 F.Supp. 1401, 1406 (1992).

          Here, finding that Algoma was unable to provide pro-duct-

specific costs but that a "relatively accurate calculation" was

presented, the ITA verified the "soundness and reasonableness" of

that methodology.   Defendant's Memorandum, p. 21, cit-ing Floral

Trade Council v. United States, 17 CIT 392, 399, 822 F.Supp. 766, 772

(1993).   The plaintiffs claim that, because actual cost data were

available, yet unreported, the ITA had to rely on BIA, which the

agency was directed to use whenever it    was "unable to verify the

accuracy of information submitted" or "whenever a party . . . [wa]s

unable to produce information re-quested in a timely manner and in

    5 Timken Co. v. United States, 18 CIT 486, 494, 852 F.Supp.
1122, 1129 (1994). But see Uruguay Round Agreements Act, Pub.L. No.
103-465, §224, 108 Stat. 4809, 4882 (1994).
Court No. 96-05-01313                                       Page 12


the form required, or other- wise significantly impede[d] an invest-

igation."     19 U.S.C. §   1677e(b) & (c) (1994).   In doing so, the

agency could consider the "degree of cooperation by the respondent .

. . in reaching its decision either to apply BIA or accept the

available infor-mation."      AK Steel Corp. v. United States, 21 CIT

1204, 1223 (1997), remand results aff'd, 22 CIT         , Slip Op. 98-106

(1998).     Given this standard, this court cannot conclude that the ITA

was required to rely on BIA for Algoma.


            The plaintiffs argue that the company's methodology skewes

the difference-in-merchandise ("difmer") adjustment and       20-percent

test for product comparability.6     Foreign-market value could be

adjusted for differences in price attributable to dif-ferences in



    6 The petitioners stated in their brief before the agency in
regard to Algoma:

         In the instances where the U.S. sales are match- ed
    to non-identical home market products, there is no way to
    ensure that the U.S. total cost of manufacture is
    accurate, and therefore there is no way to determine
    whether the 20 percent test (to show comparability) has
    been properly performed. Moreover, there is no way to
    determine that the U.S. variable costs, which are used to
    calculate the difmer and, in turn, the margins for such
    sales, are accurate. Accordingly, BIA must be used for
    all such sales as well.

R.Doc 473, p. 14. Despite defendant's argument, the ITA did have an
opportunity to consider this matter, and it is therefore now properly
before the court.
Court No. 96-05-01313                                   Page 13


physical characteristics of the goods. See 19 U.S.C. §1677(16)(B) &

(C); §1677b(a)(4)(C) (1994).   The ITA was author-ized to

    make a reasonable allowance for differences in the
    physical characteristics of merchandise compared to the
    extent that [it] is satisfied that the amount      of any
    price differential is wholly or partly due     to such
    difference.


19 C.F.R. §353.57(a) (1994).   Furthermore, in determining whether an

allowance is reasonable, the agency "normally will consider

differences in the cost of production but, where appropriate, may

also consider differences in the market value."   Id., §353.57(b).


         The 20-percent test is set forth in Import Administra-tion

Policy Bulletin 92.2 (July 29, 1992), wherein the ITA re-ports that,

when "the variable cost difference exceeds 20%, we consider . . . the

probable differences in values of the items   to be compared [] so

large that they cannot be reasonably compared." See, e.g., SKF USA

Inc. v. United States, 19 CIT 54, 57, 874 F.Supp. 1395, 1399 (1995)

(this approach sustained on the ground that "there is a statutory

preference for comparison of most similar, if not identical,

merchandise").

         Whenever actual costs are not available and the ITA

relies on a respondent’s other, existing data to ascertain the cost

of production, a petitioner may argue that they distort the difmer.
Court No. 96-05-01313                                     Page 14


But the law does not require reliance on actual costs, and the record

indicates that the ITA made a reasonably accurate assessment of the

costs in this case, thereby minimizing any arguable distortion.

         The court is urged, "at the very least, [to] require the

Department to apply partial BIA in the comparison of non-identical

merchandise where at least one product was produced      on the strip

mill or on both mills."   Plaintiffs' Brief, p.    34.    In support of

this plea, the plaintiffs cite Cemex, S.A.    v. United States, 20 CIT

993 (1996), and Timken Co. v. United States, 18 CIT 897, 865 F.Supp.

850 (1994).   In those two cases, however, the court upheld resort to

best information otherwise available where the ITA had repeatedly

requested information which the respondents failed to provide.      Here,

the record re-flects Algoma Steel provided requested information, and

the agency's decision not to resort to BIA was in accordance with

law.
Court No. 96-05-01313                                       Page 15


                                 C

            Intervenor-defendant Stelco, Inc. claimed an adjustment to

foreign-market value for billing errors corrected by debit and credit

notes. See 61 Fed.Reg. at 13,831.    The plaintiffs allege that the ITA

erred in accepting the adjustment.       The defendant agrees that price

adjustments made for billing errors must be transaction-specific but

states that the company did allocate the debit and credit notes on a

transaction-specific basis.    See id.


            Adjustments to the price of a product in response to

billing errors for a particular customer constitute direct sell-ing

expenses.    Torrington Co. v. United States, 82 F.3d 1039, 1050

(Fed.Cir. 1996).    In order to receive an adjustment for direct

selling expenses, they must be tied to specific trans-actions.7

Stelco's method "matched each credit and debit note       to the specific

invoice or invoices to which the note applied        so that the


    7 Cf. NSK Ltd. v. United States, 190 F.3d 1321, 1328-29
(Fed.Cir. 1999) (adjustment for direct selling expenses denied
because not reported on a transaction-specific basis); AK Steel Corp.
v. United States, 21 CIT at 1224:

         The adjustments at issue are not for widely avail-
    able discounts, rebates or similar items which may or may
    not be determinable on a fixed or constant basis across
    numerous sales. Rather they are for generally variable
    adjustments for clerical or other billing err- ors. Such
    adjustments must be related on the record to specific
    transactions, either directly or through proper
    allocation.
Court No. 96-05-01313                                    Page 16


adjustments were transaction-specific".    Defendant's Memorandum, p.

30. See also 61 Fed.Reg. at 13,831.    The defend-ant notes that,

    when the adjustment is made with reference to a specific
    invoice or invoices that cover the merchandise under
    investigation, it is clear that the adjustment is
    transaction-specific, even if it is allocated.8


The "danger of allocation . . . is the averaging effect on prices."

61 Fed.Reg. at 13,831.   Where, as here, price adjustments are tied to

specific invoices, allocations are essentially transaction-specific,

and that danger is diminished.




    8 Defendant's Memorandum, p. 31.    The ITA's Final Results herein
state that

    Stelco reported the majority of these expenses on      a
    transaction-specific basis. However, on occasion, Stelco
    allocated debit and credit notes for a par-ticular
    customer over more than one invoice. While the
    Department prefers that discounts, rebates and other price
    adjustments be reported on a transac- tion-specific
    basis, the Department has long recog-nized that some price
    adjustments are not granted on that basis, and thus cannot
    be reported on that basis.

61 Fed.Reg. at 13,831. In AK Steel Corp. v. United States,     supra,
the court recognized that, "[w]hen dealing with limited adjustments
applicable to a very few invoices[,] the distinction between
'directly transaction specific' and 'properly allocated' seems to
blur", and upheld the allowance of properly allocated adjustments.
21 CIT at 1226. The court reported that the ad-justments therein "do
appear to be proper allocations." Id. In this case, while the ITA
does appear to be confused as to wheth-er or not Stelco's adjustments
are transaction-specific, it at least takes the position that the
adjustments are properly allo-cated. See 61 Fed.Reg. at 13,831-32.
Court No. 96-05-01313                                    Page 17


         Plaintiffs’ position is also based on the discovery during

agency verification of an improper allocation to several sales of a

particular adjustment that actually pertained to just one.    See

Plaintiffs' Brief, pp. 42-43.   They claim that "this distortion did

not represent an isolated error in Stelco's re-porting; rather it

reflected Stelco's methodology for allocating price adjustments."

Id. at 44-45 (emphasis in original).   Both   the defendant and the

company claim it was indeed an "isolated instance" of incorrect

reporting, "resulting in a minor and     limited . . .   error" that

was "nothing more than a[] clerical oversight on the part of a Stelco

employee."9   Given the small number of verified sales with debit or

credit notes, however, this court is unable to determine on the

record presented wheth-er the agency's adjustment is supported by

substantial evidence.


                                D




    9 Defendant's Memorandum, pp. 34-35. See also Stelco's Brief,
pp. 11-13. The company adds that it was "the very un-usual
circumstance that a single correcting credit note was    issued for
two billing errors that was the cause of the cross-referencing
error." Stelco's Brief, p. 13. But the court fails to discern
evidence on the record that the company ordinarily issued a credit
note for each billing error.
Court No. 96-05-01313                                    Page 18


         The ITA granted MRM a circumstances-of-sale adjustment to

foreign-market value for rebates given to customers on subject

merchandise.   See 61 Fed.Reg. at 13,828.   Such adjustments are

    generally allow[ed] . . . for discounts and rebates where
    respondents have granted and paid them on sales of subject
    merchandise to unrelated parties during the period of
    review. Such discounts or rebates should be part of a
    respondent's standard business practice and not intended
    to avoid potential antidumping duty liability.

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof From the Federal Republic of Germany; Final Results
Court No. 96-05-01313                                     Page 19


of Antidumping Duty Administrative Review, 56 Fed.Reg. 31,692, 31,717

(July 11, 1991).


             The plaintiffs complain that MRM presented insufficient

evidence to support its claimed adjustment, but the record shows that

the ITA was provided with substantial evidence in the form of

correspondence between the company and some of its cus-tomers noting

the existence of the rebates.     See ConfDoc 194; Defendant's

Confidential Appendix, Exhibit 9.     In addition, the agency was able

to verify that the adjustments were tied to the specific transactions

at issue.    See id.


                                 E

            In determining MRM's cost of production, the ITA calcu-

lated the company's general-and-administrative ("G&A") expenses for

the period of review (February 1993 through July 1994) based upon

audited annual financial statements for 1993 and 1994.     See 61

Fed.Reg. at 13,829.     The plaintiffs contend that

    MRM's inclusion of partial-year data in its reported G&A
    expense ignores the Department's long-standing practice of
    calculating G&A expense "using the annual audited income
    statement for the [one] fiscal year covering the greatest
    part of the [period of review]."


Plaintiffs' Brief, p. 61, citing Ferrosilicon From Brazil; Final

Results of Antidumping Duty Administrative Review, 61 Fed. Reg.
Court No. 96-05-01313                                   Page 20


59,407, 59,412 (Nov. 22, 1996).   They ask this court to instruct the

agency "to recalculate MRM's G&A expense using MRM's 1993 annual

audited financial statements only."   Id. at 62.
Court No. 96-05-01313                                    Page 21


          As noted above, the ITA historically has had latitude in

determining cost of production but also has been charged with the

duty to make determinations as accurately as possible.    The agency

admits that its

      long-standing practice is to calculate G&A expenses from
      the audited financial statements which most closely
      correspond to the [period of review].


61 Fed.Reg. at 13,829.    It does this because of "their nature as

period costs."    Final Determination of Sales at Less Than Fair Value:

Furfuryl Alcohol From Thailand, 60 Fed.Reg. 22,557, 22,560 (May 8,

1995).   General-and-administrative expenses

      can neither be easily nor accurately matched to the
      revenues generated from the sales of an individual unit
      of production. Instead, G&A expenses are typ-ically
      incurred in connection with a company's over- all
      operations. Many expenses categorized as G&A, such as
      insurance and bonus payments, are incurred sporadically
      throughout the fiscal year. Moreover, G&A expenses are
      often accrued during the fiscal    year based on estimates
      that are then adjusted to actual expenses at year-end.

Id.

          In each determination cited by the plaintiffs to sup-port

their contention that the 1994 data should be excluded, the ITA took

such an approach because the data came from unaudited financial

statements.   See, e.g., id. at 22,560-61; Certain Cut-to-Length

Carbon Steel Plate From Finland: Final Results of An-tidumping Duty

Administrative Review, 61 Fed.Reg. 2,792, 2,794 (Jan. 29, 1996);
Court No. 96-05-01313                                   Page 22


Final Determination of Sales at Less Than Fair Value: Canned

Pineapple Fruit From Thailand, 60 Fed.Reg. 29,553, 29,565 (June 5,

1995).

          Reliance on full-year audited financial statements pro-

vides a more accurate picture of general production costs than

expenses attributed to a shorter period.   Where, as here, however,

the period of review covered substantially more than one year, and

audited annual financial statements for the two years involved were

available, the ITA's decision to rely on both of them to determine

G&A expenses for MRM was within its discretion and is supported by

substantial evidence on the record.


                               F

          The plaintiffs complain that the ITA should not have

allowed an adjustment to foreign-market value for MRM's estimat-ed

credit expenses because the company initially had records of actual

expenses but chose not to preserve them.   See Plaintiffs' Brief, p.

55.   The defendant agrees that this issue should be remanded for

reconsideration because the ITA

      wrongly equated MRM's not retaining actual dates of
      payment in its computer records beyond 90 days with the
      circumstance where a respondent has no reason to ever
      maintain such data.

Defendant's Memorandum, pp. 46-47.
Court No. 96-05-01313                                    Page 23



          The company responds that automatic purging of this data

from its computer system was in line with its usual business

practice, complied with Canadian generally accepted accounting

principles, and the ITA "accepted an estimate because it was

reasonably accurate."   Response Brief of Gerdau MRM Steel, pp. 10-11.

          In NSK Ltd. v. United States, 19 CIT 1013, 1026, 896

F.Supp. 1263, 1274 (1995), aff'd in part, rev'd in part on other

grounds, 115 F.3d 965 (Fed.Cir. 1997), the court upheld the ITA's

disallowance of home-market credit expense where a respondent's

    computer records did not permit transaction or cus-tomer-
    specific calculation of credit expenses [and,]
    consequently, it calculated this expense by allocat- ing
    total home market credit expenses over each trans-action.


The court stated that "an adjustment to FMV for differences in

circumstances of sale is appropriate where the value determination is

directly correlated with specific in-scope merchandise    on the basis

of actual costs."   19 CIT at 1026-27, 896 F.Supp.   at 1274, citing

Smith-Corona Group, Consumer Prods. Div., SCM Corp. v. United States,

713 F.2d 1568, 1580 (Fed.Cir. 1983),   cert. denied, 465 U.S. 1022

(1984).   In Krupp Stahl A.G. v. United States, 17 CIT 450, 822

F.Supp. 789 (1993), the court up-held resort to BIA where original

data were unavailable because    the respondent had discarded its
Court No. 96-05-01313                                  Page 24


business records after five years in accordance with the rules of its

home country.


         Here again, the court must emphasize that the most im-

portant consideration in cost determination is accuracy of the

information submitted. Respondents will not be allowed to manip-ulate

margins via reporting to their own convenience, nor will petitioners

be allowed to do so by insisting on BIA where another, accurate

approach is possible.   If the ITA is able, upon
Court No. 96-05-01313                                    Page 25


remand, to make a reasonably accurate estimation of the credit

expenses tied to specific transactions from the data submitted     by

MRM, resort to BIA, which is now called "facts otherwise available"

in the Trade Agreements Act of 1979, as amended by   the Uruguay Round

Agreements Act, Pub. L. No. 103-465, §231(c), 108 Stat. 4809, 4896

(1994), should not occur. If, however, the agency is unable to verify

the accuracy of the data made available, reliance on BIA would be

appropriate.


                                G

         The plaintiffs complain about a ministerial error in

Algoma's model-match program.   Both the defendant and the com-pany

confirm the existence of such an error.   See Defendant's Memorandum,

p. 14; Brief for Algoma Steel Inc., p. 30.


                                II

         In view of the foregoing, plaintiffs' motion for judg-ment

upon the agency record must be granted to the extent of re-mand to

the ITA for reconsideration of (c) their allegation of    a

methodological problem in Stelco, Inc.'s allocation of price

adjustments and (f) the allowance of an adjustment for MRM's credit

expenses, as well as (g) to correct the agreed-upon min- isterial
Court No. 96-05-01313                                    Page 26


error in Algoma Steel Inc.'s model-match program.   In   all other

respects, the aforesaid motion must be, and it hereby is, denied.



           The agency may have 90 days for such reconsideration and

to report the results thereof to this court, whereupon the parties

may serve and file any comments thereon within 30 days, with replies

thereto due 15 days thereafter.

           So ordered.


Decided:   New York, New York
           June 2, 2000


                                   ______________________________
                                             Judge
