Commerce Drops CEP Offset for Exporter, Narrowly Ups AD Rate

The Commerce Department in remand results submitted to the Court of International Trade on July 12 nudged exporter Gujarat Fluorochemicals' antidumping duty rate from 10.01% to 10.36% after reversing its decision to grant the company a constructed export price offset (Daikin America v. U.S., CIT # 22-00122).

On remand, Commerce also stuck by its decision to find that Gujarat properly reported various U.S. movement expenses on an allocated basis instead of a transaction-specific basis as originally requested by Commerce in the AD investigation on granular polytetrafluorethylene from India.

In the investigation, Commerce preliminarily granted a constructed export price offset on the grounds that the normal value level of trade (LOT) was at a "more advanced stage of distribution" than the level of trade for the constructed export price. The agency continued to grant the adjustment in the investigation's final determination, though Commerce acknowledged that Gujarat failed to provide an adequate quantitative analysis on the exporter's "claimed differences in channel-specific selling functions and corresponding levels of intensity."

The agency continued to grant the adjustment because it had failed to alert the company to the deficiencies in its analysis. The trade court rejected this finding, declaring that Commerce's supplemental questionnaire to Gujarat gave the exporter a chance to remedy its insufficient quantitative analysis (see 2403190037).

As a result of this finding, Commerce dropped the adjustment. The agency said the exporter "did not demonstrate how indirect selling expenses vary by the different claimed LOTs, as required by the questionnaire," nor did the company provide any "selling expenses data from its accounting records or trace expense data to specific sales activities."

The company offered only a selling functions chart and a discussion of the levels of trade in the chart. Gujarat's response didn't include a sufficient analysis of how the expenses assigned to its sales made at different trade levels affect price comparability or an "explanation of how that quantitative analysis supports the claimed levels of intensity for the selling activities reported in the selling functions chart," the remand results said.

The trade court also sent back Commerce's acceptance of Gujarat's reporting of U.S. movement expenses, including domestic inland freight, international freight and domestic inland insurance expenses, on an allocation basis. The court told the agency to review whether it was feasible for the company to report on a transaction-specific basis, whether the expenses were "calculated on as specific a basis as possible" and whether the reporting caused inaccuracies or distortions.

Commerce said its feasibility determinations "must account for the records maintained by the respondent in the ordinary course of business" and that, as a result, it wasn't feasible for Gujarat to report these expenses on a transaction-specific basis. While the record has product batch numbers, the record doesn't show that the batch numbers are tracked by Gujarat in the "ordinary course of business."

Trying to link a specific batch number to a certain invoice also proved to be a "burdensome exercise involving a manual review of shipping documents" for Gujarat's sales to affiliated and unaffiliated U.S. buyers, the remand said. As a result, due to Gujarat's prior experience in AD cases, the company "reasonably reported the movement expenses at issue in the most accurate way that it could," Commerce said.

The agency also found that the transaction-specific reporting was as specific as feasible and didn't cause distortions or inaccuracies.