                                      Slip Op. 03 - 28

 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 remand determination sustained.]


                                                                   Decided: March 18, 2003

      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, Lucius
B. Lau, Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Elizabeth G. Candler), for defendant The United States; (of counsel:
William G. Isasi, Attorney, U.S. Department of Commerce).
Consol. Court No. 00-09-00447                                                                Page 2



                                          OPINION

       This opinion presumes familiarity with Carpenter Technology Corp. v. United States,

Slip Op. 02-77 (July 30, 2002). Previously, the Court found that “banding” to account for the

absence of complete variable cost of manufacturing (“VCOM”) information was not unlawful

per se for the purpose of matching U.S. and foreign market sales, however the matter was

remanded for clarification of the statement that banding had been undertaken “in order to obtain

more identical matches.” Commerce was also requested to clarify and, as necessary, reconcile

Carpenter’s allegation that it had applied different standards to Viraj Impoexpo Ltd. (“Viraj”)

and Panchmahal Steel Ltd. (“Panchmahal”). See Slip Op. 02-77 at 17-18.

       Remand has resulted in de minimis antidumping duties. For U.S. sales that did not have

an identical foreign market match due to incomplete VCOM information, Commerce determined

that the weighted average of the dumping margin calculated for matched sales is “a reasonable

approximation of dumping attributable to Viraj’s unmatched sales because it is based on Viraj’s

own sales data and the Department has found no facts on the record to suggest that such a use

would be distortive[ and] . . . it is consistent with Department practice.” Remand Results at 4,

referencing Porcelain-on-steel Cooking Ware from Mexico: Final Results of Antidumping Duty

Administrative Review, 58 Fed. Reg. 43327, 43329 (Aug. 16, 1993).           Regarding resort to

“banding” to compensate for the incomplete VCOM information, Commerce explains that

              the facts of the record support the conclusion that banding is a reasonable
              alternative to the difference in merchandise analysis. Specifically, Viraj’s
              direct materials costs evidence cost differences between two size ranges.
              Commerce used banding according to these two size ranges in the absence
              of [complete] VCOM data. Therefore, where VCOM data was not
              available due to confusion over reporting requirements, rather than lack of
Consol. Court No. 00-09-00447                                                                Page 3



               cooperation, the use of banding as non-adverse facts otherwise available
               for Viraj was reasonable.

                       In addition, Commerce reviewed the record with respect to the
               “disparate” treatment between Viraj and Panchmahal. Based on this
               review, Commerce concluded that such “disparity” is attributable to
               Panchmahal’s failure to cooperate (i.e., Panchmahal’s refusal to provide
               information in the manner in which it was requested by the Department).[]
               Furthermore, the Department noted that Panchmahal never reported cost
               data that took size into account for its comparison market, thus precluding
               the Department from banding its sales or deriving any information to
               make differences in merchandise adjustments to normal value. Unlike
               Panchmahal, and as affirmed by this Court, Viraj was a cooperative
               respondent.
                                                  ***
                       . . . [W]hile the deficiencies [in Viraj’s and Panchmahal’s
               responses] may relate to similar cost information, the Department
               determined that the reasons for the deficiencies were different. ([I].e.,
               Viraj was confused as to the reporting requirements while Panchmahal
               simply refused to report the requested data. See Final Results at 4-7, 11-
               13.) The Act clearly authorizes the Department to treat respondents
               differently based on their level of cooperation. See 19 U.S.C. 1677e(b).
               As such, the “disparate” treatment of Viraj and Panchmahal does not
               violate the statute.

Remand Determination at 3, 4-5 (internal citations omitted; highlighting in original).

       The government argues the remand results should be sustained in their entirety. Viraj has

provided no comment. Carpenter Technology Corporation (“Carpenter”) argues for a different

model-matching methodology and for a different margin to assign to unmatched sales as facts

otherwise available. Specifically, Carpenter again takes issue with the fact that Commerce

reached different results with respect to Panchmahal and Viraj. It argues that on remand the

correct interpretation of the remand order was for Commerce to

               address in a substantive manner any difference in the respondents’ data
               submissions that supports use of different methodologies as to the two
               respondents. To simply state that the different methodologies are
               appropriate because Panchmahal failed to cooperate in not providing cost
Consol. Court No. 00-09-00447                                                                   Page 4



               information to enable accurate product matching, when Commerce itself
               recognizes that Viraj also did not provide cost information to enable size-
               specific product matching, is a distinction without any meaning here.
               Because the two respondents both failed to provide the requested data to
               Commerce that would have enabled the agency to make size-specific
               product matches, Commerce has no reasonable basis for penalizing
               Panchmahal for this failure and treating Viraj much more favorably.

                       In its decision to apply an adverse facts available rate to
               Panchmahal, the Department highlighted the significance of the size
               variable, noting that Panchmahal’s “exclusion of the size characteristic in
               its reported control numbers” was contrary to the instructions expressed in
               the original questionnaire, and that it was a “necessity” to report costs on a
               size basis. Decision Memorandum, at 6. Yet, despite the similar
               admission that Viraj’s costs were reported “irrespective of size altogether”
               (and, therefore, unusable), Commerce treated Viraj much more favorably
               by applying a “banding” methodology and by using non-adverse facts
               available.

                        Given this, the only way to correctly respond to the Court’s
               remand instructions was for Commerce to acknowledge that the similar
               failings of both companies should have similar consequences. As the
               Court has said, “[i]t was incumbent upon Commerce to apply its rationale
               to all respondents similarly situated.”

Def.-Int.’s Comments at 3-4. Carpenter complains that Commerce did not follow its policy of

calculating costs consistent with model matching criteria developed at the outset of an

investigation or review1 with respect to Viraj although it applied that policy with respect to

Panchmahal. Carpenter argues that banding is not a “neutral” use of facts otherwise available

because Commerce here “made product comparisons without size-specific data by creating


       1
            Def.-Int’s Comments at 4, referencing Antidumping Duties; Counterveiling Duties;
Proposed Rule, 61 Fed. Reg. 7308, 7339 (Feb. 27, 1996) (“The Department’s practice is to calculate
costs consistent with model matching criteria it develops [at the] outset of an investigation or
review. The product categories developed in such fashion generally account for significant
differences in actual costs affecting price. The Department intends to continue this practice because
it prevents any manipulation of the cost analysis through changes in internal product
classifications.”).
Consol. Court No. 00-09-00447                                                               Page 5



bands of merchandise so broad that a certain amount of sales were thus destined to be

‘comparable’ to each other[,] . . . a ‘gift’ to Viraj, while Panchmahal was penalized for a similar

deficiency in its data.” Id. at 4-5.

        Commerce has correctly interpreted the order of remand. In its initial briefs, Carpenter

challenged Commerce’s determination on Viraj’s cooperativeness by arguing inter alia that

deeming Viraj cooperative and Panchmahal uncooperative could not be reconciled. Viraj’s

cooperation could be sustained on the basis of independent record evidence. Panchmahal is not a

party to this proceeding, but the treatment of its circumstances also appeared relevant to

Carpenter’s allegation of a results-oriented determination.     Rather than undertake arguendo

examination of the respective requests for data and responses from those respondents, the Court

considered it appropriate to remand the issue to Commerce for clarification and, as necessary,

reconciliation. The remand results adequately explain Commerce’s reasoning for its treatment of

Viraj as distinct from Panchmahal for purposes of this proceeding. 2

        Carpenter also continues to insist that “[b]anding for either party has the effect of

obviating, rather than correcting, differences in product characteristics and the attendant

matching problems caused by missing cost data.” Id. at 5. Carpenter alleges that through

banding “a double benefit was conferred, as the product matches that were so dissimilar that they

required constructed value even after the products were redefined by two universal ‘bands’

produced a margin that was based on already artificially constructed ‘identical matches.’” Id.

(italics in original).


        2
        Indeed, Carpenter’s argument could also be construed as advocacy for similar treatment
of Panchmahal.
Consol. Court No. 00-09-00447                                                               Page 6



       Carpenter’s other arguments essentially restate arguments the Court rejected in ruling on

the initial motions for judgment on the agency record, see Slip Op. 02-77 at 16-17, and these

arguments are no more persuasive at this time. As noted in the prior opinion, differences in

merchandise must generally exceed 20 percent before merchandise is presumed not comparable.

Carpenter’s double benefit theory, one of compounding, does not demonstrate, as a matter of

fact, that banding produced distorted results, that products within each band are so dissimilar in

size from their counterpart as to be incomparable, or that Commerce could not have been other

than “satisfied” that a size difmer adjustment was absolutely necessary. Commerce may depart

from policy if it provides a reasonable explanation for doing so, e.g., Industria de Fundicao Tupy

v. United States, 20 CIT 875, 876, 936 F.Supp 1009, 1015 (1996), and it has done so here.

       Carpenter lastly complains that it was unclear why the Court observed that the 3.87

percent non-adverse less-than-fair-value margin determined against Grand Foundry in 1994

appeared to be a “tenuous fit” to use for Viraj’s unmatched sales. The Court’s observation was

based upon: (1) the age of that rate; (2) the apparent lack of connection between that respondent

and the one at bar; (3) whether there is other evidence in the record that Commerce may

reasonably conclude is more probative of Viraj’s present circumstances than the older non-

adverse LTVF rate (e.g., the zero percent margin determined against Viraj in 1997); and (4) the

Court’s conclusion with respect to the government’s argument in opposition thereto. The Court

did not direct Commerce to use a particular rate, only that selected data have to evince a

“rational relationship between data chosen and the matter to which they apply.” Slip Op. 02-77

at 21 n.12, quoting Manifattura Emmepi S.p.A. v. United States, 16 CIT 619, 624, 799 F.Supp.

110, 115 (1992).
Consol. Court No. 00-09-00447                                                 Page 7




                                     Conclusion

       Commerce’s remand results comply with the prior opinion and order and will be

sustained.



                                    ____________________________________________
                                            R. KENTON MUSGRAVE, JUDGE

Dated: March 18, 2003
       New York, New York
