Commerce Can't Reject Evidence Then Use AFA in CVD Review, Exporter Tells Federal Circuit

The Commerce Department erred by rejecting countervailing duty respondent Uttam Galva's submissions on an affiliated company then hitting the respondent with adverse facts available, the respondent, Uttam Galva Steels Limited, argued in a Feb. 4 brief at the U.S. Court of Appeals for the Federal Circuit. The defendant-appellees in the case, led by Commerce, argued that the agency can reject evidence that detracts from an AFA calculation if it does't have a complete response. But this "abdicates Commerce's responsibility" to look at the substance of detracting information, Uttam Galva said (Uttam Galva Steels Limited v. United States, Fed. Cir. #21-2119).

The case concerns an administrative review of the countervailing duty order on corrosion-resistant steel products from India. In the review, Commerce hit Uttam Galva with a 588.42% AFA rate over its failure to admit to the affiliation with cross-owned producer of subject merchandise, Lloyds Steel Industries Limited. Uttam Galva only conceded the existence of the affiliate after prompting from Commerce and, even after doing so, mischaracterized its acquisition of the company, Commerce said. In April 2021, the Court of International Trade upheld Commerce's decision to stick Uttam Galva with the high AFA rate (see 2104300045).

Uttam Galva then appealed the decision, where it was met with an initial reply brief from the CVD petitioners California Steel Industries and Steel Dynamics (see 2201110069). The defendant-appellees told the Federal Circuit that Uttam Galva impeded the administrative review by omitting the affiliation information, warranting AFA. The Department of Justice agreed with this assessment, further arguing that Uttam Galva clearly ignored the plain language of its information request (see 2201180037).

In its reply, Uttam Galva said that it is "unreasonable for Commerce to expect that every relevant piece of information will be provided to any inquiry and that no supplemental requests will be necessary for clarifications." The respondent says it gave Commerce the information it requested in the review, eventually clarifying the timeline and context of its initial affiliation submission, and thus, did not impede the investigation. "Once Commerce gives an opportunity to remedy the deficiency, it is unreasonable for Commerce to ignore the information provided to remedy the deficiency," the brief said.

Uttam Galva also argued that LSIL did not meet any of the conditions for being listed as an affiliate since it did not produce subject merchandise, provide an input for the production of subject merchandise nor supply a good to Uttam Galva companies. Since LSIL wasn't the type of company that required an affiliate submission, Uttam Galva didn't impede the proceeding by not telling Commerce about the affiliation, the brief said.