Commerce Continues to Use Likely Selling Price to Fill Production Cost Data on Remand at CIT

The Commerce Department continued to rely on antidumping duty respondent Dillinger France's normal books and records as facts otherwise available to fill in missing cost of production data. Submitting remand results on Nov. 16 to the Court of International Trade, Commerce said that using Dillinger's normal books and records to value both prime and non-prime merchandise "is the only reasonable approach" since it recognizes that where Dillinger cannot make all its merchandise perfectly, the lost value of the imperfect products is actually a cost of making the perfect goods "and should be accounted for as such" (Dillinger France S.A. v. United States, CIT #17-00159)

The case concerns the antidumping duty investigation on carbon and alloy steel cut-to-length plate from France. In the investigation, Dillinger submitted information on its allocation of costs between its non-prime and prime products. Dillinger's books, while in accordance with Generally Accepted Accounting Principles, assigned costs to the non-prime products based on their "likely selling prices," rather than reporting the cost of the goods. This was a no-go for the U.S. Court of Appeals for the Federal Circuit, which remanded the case to Commerce so the agency could get better data.

Commerce then attempted to do so, issuing a supplemental questionnaire to Dillinger requesting information about the product-specific costs of the non-prime goods. According to Commerce, Dillinger "failed to give either the physical characteristics of non-prime products produced or its actual product-specific costs of production of non-prime products, despite arguing that the actual costs of making non-prime products should have been used." Commerce continued to apply facts available and saddled Dillinger with a 6.15% dumping margin (see 2108270056). CIT remanded this position again (see 2208180058).

Returning to the court for a third time, Commerce continued to explain why relying on Dillinger's books and records, which value non-prime goods at the likely selling price, is the only reasonable course. The agency said that while Dillinger may intend to make 100 prime units, it may find after testing that two are imperfect.

"Relying on Dillinger’s normal books and records, as facts available, to value both the prime and non-prime merchandise is the only reasonable approach because it recognizes that, where Dillinger cannot produce 98 perfect plates without producing two imperfect plates, the lost value of the two imperfect plates is actually a cost of producing the 98 perfect ones and should be accounted for as such," the agency said. Dillinger, in comments on the draft remand, proposed assigning the overall average cost of all prime products. Commerce said that this was "unreasonable because, as Dillinger previously conceded, its proposed methodology is 'just an estimate.'

"Thus, even though both Dillinger’s proposal and Dillinger’s normal books and records are flawed because Dillinger chooses not to track the actual costs of producing non-prime products, we find that the use of the amounts recorded in Dillinger’s normal books and records is reasonable for use as facts otherwise available."