Commerce Sticks With Reliance on Likely Selling Price of Non-Prime Goods on Remand at CIT

The Commerce Department stuck by its decision to rely on antidumping duty respondent Dillinger's books and records to find the cost of production (COP) for non-prime products, the agency said in Dec. 15 remand results submitted to the Court of International Trade. Commerce said that relying on Dillinger's books and records, or the recorded total costs assigned to the prime and non-prime goods, was the "only reasonable approach" (AG der Dillinger Huttenwerke v. United States, CIT #17-00158).

The case concerns the antidumping duty investigation on carbon and alloy steel cut-to-length plate from Germany. Dillinger challenged Commerce's COP determination for the company's prime and non-prime products. The agency found that Dillinger uses internal "factory results reports" to value the non-prime products at their "likely selling prices," using this value as an offset to the production of prime goods. In the case's first opinion, CIT remanded Commerce's reliance on the price offset, finding Commerce must use a respondent's actual cost data as opposed to its likely selling price in line with U.S. Court of Appeals for the Federal Circuit precedent (see 2108180046).

In the separate Federal Circuit case, Dillinger France v. U.S., the appellate court sent back the agency's decision to adjust the reported costs of the respondent's non-prime plate based on the likely selling price for non-prime plate, requiring Commerce to find the actual cost of production for prime and non-prime plate. Given that Dillinger France was nearly identical to Dillinger's case, the court remanded the case on the same grounds.

On remand, Commerce reopened the record and issued a supplemental questionnaire to get the physical characteristics of the non-prime goods and the actual cost of making the non-prime goods. Dillinger said in response that it could not give any actual cost information, arguing instead that Commerce should use the average cost of total cut-to-length plate production for calculating any COP adjustment since non-prime plate can be set apart from prime plate only at the end of the production process. Commerce rejected this proposal after finding that using this average would distort the disparity in costs across the products. The agency filled the record with facts available, relying on the cost assigned to the prime and non-prime goods as likely selling price set in Dillinger's normal books.

The trade court again remanded the issue, finding that these same steps were taken by Commerce in the Federal Circuit case and were summarily rejected (see 2209230053). On remand, the agency again stuck by its decision, further explaining that reliance on Dillinger's normal books and records stands as the only reasonable approach for finding the allocation of total costs between prime and non-prime goods and the per-unit costs of non-prime products. Commerce said the production of non-prime goods "is an inevitable consequence of its production of prime products because Dillinger does not intend to produce non-prime products."

Relying on the respondent's books as facts available recognizes that where the company cannot make 98 perfect plates without two imperfect plates, the lost value of the two plates is a cost of making the 98 perfect ones "and should be accounted for as such," the remand submission said. The result of the remand is an unchanged antidumping duty rate for the respondent.