Thai Pineapple Canning Industry Corp. v. United States ( 2000 )


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  •                        Slip Op. 00-17
    UNITED STATES COURT OF INTERNATIONAL TRADE
    _________________________________
    :
    THAI PINEAPPLE CANNING INDUSTRY     :
    CORP., LTD., and MITSUBISHI         :
    INTERNATIONAL CORP.,                :
    :
    Plaintiffs,                :   Court No. 98-03-00487
    :
    v.                   :
    :   Public Version
    THE UNITED STATES,                  :
    :
    Defendant,                 :
    :
    and                        :
    :
    MAUI PINEAPPLE CO., LTD., and       :
    INTERNATIONAL LONGSHOREMEN’S AND    :
    WAREHOUSEMEN’S UNION,               :
    :
    Defendant-Intervenors.    :
    ________________________________    :
    [ITA remand results affirmed in part, reversed and remanded in
    part.]
    Dated: February 10, 2000
    Dickstein Shapiro Morin & Oshinsky LLP (Arthur J. Lafave
    III, Douglas N. Jacobson, and Patricia M. Steele) for
    plaintiffs.
    David W. Ogden, Acting Assistant Attorney General,
    David M. Cohen, Director, Commercial Litigation Branch, Civil
    Division, United States Department of Justice (Lucius B. Lau),
    Christine E. Savage, Office of the Chief Counsel for Import
    Administration, United States Department of Commerce, of
    counsel, for defendant.
    Collier, Shannon, Rill & Scott, PLLC (Paul C. Rosenthal
    and David C. Smith, Jr.) for defendant-intervenors.
    Court No. 98-03-00487                                  Page 2
    OPINION
    RESTANI, Judge:     On May 5, 1999, the court remanded the
    final results of the Department of Commerce, International
    Trade Administration (“Commerce” or “the Department”) in
    Canned Pineapple Fruit from Thailand, 
    63 Fed. Reg. 7,392
    (Dep’t Commerce 1998) (final results of antidumping duty
    admin. rev.) [hereinafter “Final Results”].    See Thai
    Pineapple Canning Indus. Corp. v. United States, No. 98-03-
    00487, 
    1999 WL 288772
     (Ct. Int’l Trade May 5, 1999)
    [hereinafter “Thai Pineapple”].1   The case concerned a
    challenge by Thai Pineapple Canning Industry Corp., Ltd.
    (“TPC”) and Mitsubishi International Corp. (“MIC”)
    (collectively “TPC”) to the Department’s Final Results.     In
    its remand instructions, the court instructed Commerce to (1)
    reconsider the date of sale, (2) reconsider the matching of
    costs to sales on a fiscal year basis for cost of production
    (“COP”) and constructed value (“CV”) purposes, and (3)
    recalculate the constructed export price (“CEP”) profit
    calculation.   Thai Pineapple, 
    1999 WL 288772
    , at *11.    Because
    neither TPC nor Commerce had an adequate opportunity to
    1  Familiarity with the court’s earlier opinion is
    presumed.
    Court No. 98-03-00487                                  Page 3
    address the assessment rate of entries made after the final
    determination in the original less-than-fair-value
    investigation, that issue was remanded to provide the parties
    a further opportunity to brief the issue.     Thai Pineapple,
    
    1999 WL 288772
    , at *2.     The court upheld Commerce’s use of a
    single assessment rate for the period of review (“POR”).        
    Id. at *10-11
    .
    Commerce issued its remand determination on September 2,
    1999.   See Final Results of Redetermination Pursuant to Court
    Remand: Thai Pineapple Canning Industry Corp., Ltd., and
    Mitsubishi International Corp. v. United States, Court No. 98-
    03-00487 [hereinafter “Remand Results” or “RR”].
    Jurisdiction and Standard of Review
    The court has jurisdiction pursuant to 
    28 U.S.C. § 1581
    (c) (1994).     In reviewing final determinations in
    antidumping duty investigations, the court will hold unlawful
    those agency determinations which are unsupported by
    substantial evidence on the record, or otherwise not in
    accordance with law.     19 U.S.C. § 1516a(b)(1)(B)(i) (1994).
    I.   Date of Sale
    A.   Background
    In the Final Results, Commerce used the date of contract
    for purposes of determining the date of sale for export price
    Court No. 98-03-00487                                 Page 4
    (“EP”) sales and third country sales.    Final Results, 63 Fed.
    Reg. at 7,394-95.    The court found that Commerce’s policy as
    of the time of its review of TPC was to use invoice date for
    date of sale, absent a significant reason to do the contrary.
    See Thai Pineapple, 
    1999 WL 288772
    , at *5-6.    The court
    therefore remanded for Commerce to state whether there was
    “another reason for rejecting invoice date” and to “square its
    reasoning with its other contemporaneous determinations.”         
    Id. at *6
    .    In the Remand Results, Commerce reconsidered the date
    of sale determination, and again concluded that “contract date
    remains the appropriate date of sale for TPC’s third country
    sales, based on the record in this case.”    RR, at 13.     The
    Department states that this decision is consistent with its
    date of sale methodology in contemporaneous determinations.
    
    Id.
    B.    Discussion
    TPC argues that Commerce has not provided an adequate
    explanation for not utilizing invoice date as date of sale in
    its remand determination.
    The Department announced a new policy, applicable to this
    case, of using invoice date for date of sale unless there is
    information indicating that date of contract should be used
    because all material terms of the sale were firmly fixed at
    Court No. 98-03-00487                                      Page 5
    that time.     See Thai Pineapple, 
    1999 WL 288772
    , at *5.      This
    policy is now reflected in Commerce’s regulations.2        
    19 C.F.R. § 351.401
    (i) (1999).
    The announced policy was not applied to this matter
    although it was applied to other contemporaneous matters.           See
    Thai Pineapple, 
    1999 WL 288772
    , at *6.      The new rule
    establishes a presumption that invoice date will be the date
    of sale.     See 
    19 C.F.R. § 351.401
    (i).   If Commerce can
    establish “a different date [that] better reflects the date on
    which the exporter or producer establishes the material terms
    of sale,” Commerce may choose a different date.      
    Id.
         Commerce
    has cited nothing of substance which indicates sales terms
    were fixed at an earlier date.     Nor has it cited any other
    credible reason for disregarding its announced presumption.
    See Antidumping Duties; Countervailing Duties - Final Rule, 
    62 Fed. Reg. 27,296
    , 27,349 (Dep’t Commerce 1997) (invoice date
    presumption applies “absent satisfactory evidence that the
    2  Commerce at times states that the policy reflected its
    then current practice. Thus, the court assumes its practice
    had evolved over time. See also Antidumping Duties;
    Countervailing Duties - Notice of Proposed Rulemaking and
    Request for Public Comments, 
    61 Fed. Reg. 7,308
    , 7,330 (Dep’t
    Commerce 1996) (“This is a change from prior practice under
    which the Department based the date of sale on the date on
    which the ‘essential terms of sale’ (normally price and
    quantity) were established”).
    Court No. 98-03-00487                                 Page 6
    terms of sale were finally established on a different date.”)
    Commerce does not cite industry practice or a lag between
    invoice and shipment, or any other unusual situation,
    indicating a date, other than invoice date should be used.
    There appears to be no other case in which “rare instances” of
    changes after contract date, RR, at 17, was considered
    substantial reason to abandon the invoice date presumption.
    Under the facts of this case, i.e., rising pineapple costs,
    the fact that few purchasers sought changes is meaningless.
    The question is could the terms be changed, or were they fixed
    at the time of the initial order.    See Final Results, 63 Fed.
    Reg. at 7,394.    The evidence is that the terms could be
    changed and were changed in some instances.    See Thai
    Pineapple, 
    1999 WL 288772
    , at *4 & n.11.    There was no reason
    for Commerce to abandon its presumption in this matter.     The
    court therefore reverses Commerce’s use of date of contract
    and directs the Department to use invoice date for date of
    sale purposes.
    II. Use of Single Weighted-Average Cost of Production Covering
    Entire 18-Month Period of Review
    A.   Background
    In the Final Results, for COP and CV purposes, Commerce
    used a single weighted-average cost for the entire POR.     Final
    Court No. 98-03-00487                                     Page 7
    Results, 63 Fed. Reg. at 7,399.       TPC argued that this single
    weighted-average cost failed to take into account the rising
    cost of fresh pineapple fruit from 1994 through the POR.         Id.
    TPC alleged that this resulted in significant distortions in
    Commerce’s price-cost comparisons.       Id.
    The court found that the use of the single weighted-
    average cost did not take into account the significant rise in
    the cost of pineapple fruit, the primary input of canned
    pineapple fruit (“CPF”).       Thai Pineapple, 
    1999 WL 288772
    , at
    *3.3       The court also found that Commerce had previously
    “adjusted for changes in costs over the POR or matched costs
    to POR sales more specifically than it did here.”       
    Id.
        The
    court noted that in Fujitsu Gen. Ltd. v. United States, 
    88 F.3d 1034
     (Fed. Cir. 1996), the Federal Circuit sustained the
    use of annual weighted-average COP in calculating FMV, and
    that this was what TPC was seeking: “they want costs for a
    fiscal year matched to sales for a fiscal year.”       Thai
    Pineapple, 
    1999 WL 288772
    , at *3.       The court instructed
    Commerce to revisit the issue and “reanalyze the data to
    3
    The court noted TPC’s calculations reflecting a [ ]%
    rise in fresh pineapple costs per carton of CPF from 1994 to
    1995 and a [ ]% increase from 1994 to 1996. The price per
    standard carton in 1994 was [ ] baht, [ ] baht in 1995 and
    [ ] baht in 1996. Thai Pineapple, 
    1999 WL 288772
    , at *2,
    n.4.
    Court No. 98-03-00487                                    Page 8
    determine whether TPC has provided sufficient data to match
    costs to appropriate fiscal year sales.     If it has, in the
    absence of any proper antidumping policy reason . . . Commerce
    must proceed as it has in the past and match fiscal year costs
    with sales.”   
    Id. at *4
    .
    On remand, Commerce recalculated separate costs for
    fiscal years 1995 and 1996.   Remand Results, at 11.         “Where CV
    is the basis for normal value, we have matched 1995 U.S. sales
    to 1995 CVs, and have matched 1996 U.S. sales to 1996 CVs.
    With respect to the sales-below-cost test, we have tested 1995
    comparison market sales against 1995 costs, and have tested
    1996 comparison market sales against 1996 costs.”       
    Id.
         Third
    country sales made in December 1994, and used in the margin
    calculation, were tested against 1995 costs.     
    Id.
        Commerce
    stated that it believed 1995 annual costs were representative
    of   December 1994, “and that the use of December 1994 sales
    pursuant to the contemporaneity requirement does not warrant a
    departure from our practice of using POR costs.”       
    Id.
         TPC
    argues that the failure to use 1994 costs does not conform to
    the court’s remand instructions.     Commerce counters that its
    longstanding policy is to use costs incurred during the POR
    for its COP and CV costs analysis.     Remand Results, at 12.
    Court No. 98-03-00487                                   Page 9
    B.    Discussion
    The matching of costs actually puts two issues before the
    court: 1) the basis on which sales must be matched to costs
    (i.e. fiscal year, semi-annually, etc.) and 2) whether costs
    incurred outside of the POR, or period of investigation
    (“POI”), should be matched to the sales made during the same
    year whether or not the sales are within the POI or the POR.
    The court ruled on the first issue in Thai Pineapple, and on
    remand Commerce generally used fiscal year costs.      The court
    finds that the use of fiscal year costs adequately addresses
    the issue of TPC’s rising pineapple costs, and sustains the
    use of separate weighted-average costs for 1995 and 1996.        The
    Department’s decision to use only POR costs, however, now
    raises the second issue.
    Sections 1677b(b)(3)(A) and 1677b(e)(1) of Title 19
    require that in calculating COP and CV, the Department use
    costs “during a period which would ordinarily permit the
    production” of the foreign like product or the merchandise,
    “in the ordinary course of business.”    19 U.S.C. §
    1677b(b)(3)(A) & 1677b(e)(1) (1994).    The period to be used is
    not further defined in the statute, nor does the statute
    dictate the methodology Commerce must use to calculate COP or
    CV.    See AK Steel Corp. v. United States, No. 96-05-01312,
    Court No. 98-03-00487                                 Page 10
    
    1997 WL 728284
    , at *5 (Ct. Int’l Trade Nov. 14, 1997) (statute
    does not “address the method by which Commerce must calculate
    the COM” for either COP or CV).   Therefore, pursuant to
    Chevron U.S.A. Inc. v. Natural Resources Defense Council,
    Inc., 
    467 U.S. 837
    , 842-43 (1984), the court must defer to the
    agency’s reasonable interpretation of this statute.   Commerce
    is directed, however, to determine COP as “accurately as
    possible.”   Cinsa, S.A. de C.V. v. United States, 
    966 F. Supp. 1230
    , 1239 (Ct. Int’l Trade 1997) (quoting Timken Co. v.
    United States, 
    18 CIT 1
    , 10, 
    852 F. Supp. 1040
    , 1049 (1994)).
    Commerce states that its longstanding practice is to use the
    cost of manufacturing (“COM”)4 during the POI/POR for its COP
    4  Commerce’s standard practice in calculating COP and CV
    is to use COM, rather than cost of goods sold (“COGS”),
    because COM “represents the cost to manufacture the product
    during the period.” Certain Preserved Mushrooms from
    Indonesia, 
    63 Fed. Reg. 72,268
    , 72,273 (Dep’t Commerce 1998)
    (notice of final determination of sales at LTFV). The
    Department states that it does not generally use COGS because
    of concerns over the inclusion of the value of inventory from
    a previous period. 
    Id.
     COGS is an accounting method used to
    measure costs. Inventory value is an issue when using COGS
    because COGS is calculated by “(1) adding the cost of goods
    manufactured to the beginning finished goods inventory so as
    to find the total amount available for sale and then (2)
    subtracting the ending finished goods inventory.” Robert N.
    Anthony & James S. Reece, Accounting Principles 146 (6th ed.
    1989). Because inventory can be valued in different ways,
    Commerce expresses concern that costs based on COGS may vary
    depending on the method selected. Gov’t Supplemental Br. at 5
    (citing Accounting Principles at 151: “the choice of
    (continued...)
    Court No. 98-03-00487                                  Page 11
    and CV calculation.     The fact that a practice is longstanding,
    however, is only justification for the practice’s use if it is
    also reasonable and in accordance with law.     See Mitsubishi
    Heavy Indus., Ltd. v. United States, 
    15 F. Supp.2d 807
    , 813-14
    (Ct. Int’l Trade 1998) (approving Commerce’s test because it
    was both longstanding and consistent with law).
    Commerce analyzes costs based on the cost to produce the
    merchandise during the period in which sales are being made,
    “as opposed to the cost to produce each of the particular
    sales made during the reporting period.”     Remand Results, at
    12.   Commerce therefore requests that respondents report the
    weighted average production data based on costs incurred
    during the POI/POR.     Stainless Steel Bar from Spain, 
    59 Fed. Reg. 66,931
    , 66,938 (Dep’t Commerce 1994) (notice of final
    4
    (...continued)
    [inventory] method can have a significant effect on net
    income.”). In contrast, using COM during the period “normally
    covers the period needed to produce the subject merchandise
    just prior to export and excludes the changes in inventory.”
    Mushrooms, 63 Fed. Reg. at 72,273.
    The court requested further briefing on the Department’s
    use of COM, rather than COGS, which clarified that TPC did
    not, in fact, request that Commerce utilize a COGS
    methodology. Although TPC says that COGS would be a more
    appropriate methodology, it submitted its costs based on COM
    for each fiscal year (1994, 1995, and 1996) and it requests
    that separate fiscal year COM be used for each period. TPC
    Supplemental Br. at 4, 5, & 9. The court, therefore, need not
    resolve whether COGS should be used.
    Court No. 98-03-00487                                  Page 12
    determination of sales at LTFV).   Commerce departs from this
    practice in unique circumstances, “such as when production did
    not occur during the period of investigation.”   Id.    “[A]bsent
    strong evidence to the contrary, the Department assumes that
    the cost structure during the POI is representative and can be
    used to calculate an estimate of the cost of production.”       Id.
    Commerce recognizes that the statutory language is broad
    enough to accommodate calculating COP and CV on a different
    basis, but it has chosen to use costs during the POR/POI as a
    “consistent and predictable approach.”   Remand Results, at 27.
    In some instances, the cost of manufacturing the
    particular product sold during the POR/POI is higher than
    the cost of the identical product manufactured during the
    POR/POI; however, sometimes it is lower. We believe that
    having a consistent and predictable approach as to which
    method we use eliminates results-oriented arguments
    regarding which approach to take in a given case.
    Id.
    In requesting that Commerce deviate from the standard
    practice in this case, TPC relies principally on two
    determinations: Sweaters Wholly or in Chief Weight of Man-Made
    Fiber from Taiwan, 
    55 Fed. Reg. 34,585
     (Dep’t Commerce 1990)
    (final determination of sales at LTFV) [hereinafter
    “Sweaters”] and Fresh and Chilled Atlantic Salmon from Norway,
    
    58 Fed. Reg. 37,912
     (Dep’t Commerce 1993) (final results of
    antidumping duty admin. rev.) [hereinafter “Salmon”].     The
    Court No. 98-03-00487                                     Page 13
    court found that these determinations supported an adjustment
    for changes in costs over the POR and matching costs to sales
    more closely than was done in the original Final Results.        See
    Thai Pineapple, 
    1999 WL 288772
    , at *3-4.
    In Sweaters, the Department departed from using annual
    average unit costs because there was a significant variation
    between what was produced during the POI and what was sold
    during the POI.     55 Fed. Reg. at 34,596.   Instead the
    Department used actual costs incurred during the period of
    production.   Id.    This reasoning, however, does not require
    using costs from outside the POR in the case of TPC because
    there was no difference between the CPF produced during the
    POR and the CPF sold during the POR.     In Salmon, the
    Department did not use a single cost of cultivation (“COC”)
    for the entire eighteen month POR.     The court discussed
    Salmon in Thai Pineapple and found the reasoning in Salmon
    justified a closer matching of costs to sales:
    [G]iven the fluctuations of farmers’ costs during the
    POR, the ease with which different generations’ COC can
    be segregated and the fact that we have calculated
    separate 1990 and 1991 processing costs for respondent .
    . . we believe that it is reasonable to use separate 1990
    and 1991 COCs.
    Thai Pineapple, 
    1999 WL 288772
    , at *4 (quoting Salmon, 58 Fed.
    Reg. at 37,913).     Commerce’s explanation that the
    Court No. 98-03-00487                                  Page 14
    particularity of salmon cultivation (a typical salmon harvest
    averages eighteen to twenty-four months),5 requires the use of
    non-POR costs is reasonable.   CPF does not have the
    particularities of the subject merchandise in Sweaters or
    Salmon which would necessitate the use of non-POR costs.6
    Moreover, a closer matching of costs to sales was achieved
    upon remand in this case.
    TPC insists that the Department should have used 1994 COM
    in the calculation of CV for comparison with U.S. sales of
    goods manufactured in 19947 and for the COP calculation for
    testing third-country sales of goods manufactured in 1994.8
    5  Fresh and Chilled Atlantic Salmon from Norway, 
    56 Fed. Reg. 7,661
    , 7,662 (Dep’t Commerce 1991) (final determination
    of sales at LTFV) (“Because the growth cycle of the subject
    merchandise is approximately 18 to 24 months, we requested
    production costs for the previous two to three years”).
    6  In Stainless Steel Bar from India, Commerce also
    deviated from its usual practice and used cost information
    from outside the POR because of limited production of the
    subject merchandise during the POR. 
    62 Fed. Reg. 4,029
    ,
    4,030-31 (Dep’t Commerce 1997) (final results of new shipper
    antidumping duty admin. rev.). Limited production is not a
    concern in the case of TPC.
    7  Although TPC speaks of goods manufactured in 1994, the
    record does not reveal in which year goods were manufactured.
    8 TPC had reported five months of third-country sales
    invoiced in 1994. TPC Br. at 9-10. This was in response to
    Commerce’s request that TPC report all sales in the third-
    country for a period commencing 90 days prior to the first
    (continued...)
    Court No. 98-03-00487                                 Page 15
    TPC Comments at 2.   TPC states that sales observations with
    invoice dates in October through December of 1994 “were
    excluded pursuant to the sales below cost test.”    TPC Comments
    at 6 n.6 & Ex. 1 (citing Commerce’s “Below Cost HM Sales”
    table).   TPC alleges that the 1995 costs are not
    representative of 1994 sales.   Although TPC’s 1994 weighted-
    average costs may be somewhat lower than the 1995 costs,9 this
    is not an investigation of 1994 sales, and only very year-end
    8(...continued)
    date of sale in the United States. Because Commerce based
    date of sale on date of contract, and the date of contract
    preceded the date of entry into the United States by several
    months, “the first date of sale on an EP sale to the United
    States [resulting in an entry] during the POR . . . took place
    in November 1994 and TPC was required to report sales in
    Germany commencing with invoices issued in August 1994, 90
    days before.” TPC Br. at 10, n.25. The “90/60" day
    contemporaneity window exists because Commerce limits the
    universe of potential matches to those sales “within 90 days
    before and 60 days after the month of the U.S. sale.” E.I.
    DuPont de Nemours & Co. v. United States, No. 96-11-02509,
    
    1998 WL 42598
    , at *13 (Ct. Int’l Trade Jan. 29, 1998).
    9  The finished product costs rose by [ ]% from 1994 to
    the first half of 1996, but only rose by [ ]% from 1994 to
    1995. Thai Pineapple, 
    1999 WL 288772
    , at *2 n.4. Using
    separate fiscal year costs has therefore narrowed the cost
    increase experienced by TPC because 1995 costs were used
    instead of the single weighted-average cost for the entire
    POR.
    Court No. 98-03-00487                                  Page 16
    1994 third-country and U.S. sales were used in the margin
    calculation.10   Remand Results, at 11.
    Because the statute permits Commerce to determine the
    period “which would ordinarily permit the production” of the
    foreign like product or the merchandise, “in the ordinary
    course of business,” it was not unreasonable, under the facts
    of this case, for Commerce to select fiscal years within the
    POR as the relevant period for calculating costs.     The court
    finds that in this case, using separate 1995 and 1996 costs
    sufficiently accounts for the rising pineapple costs incurred
    by TPC, and complies with the court’s remand instruction to
    “match fiscal year costs with sales.”     Thai Pineapple, 
    1999 WL 288772
    , at *4.   The court does not find that the circumstances
    of this case warrant using costs from outside of the POR, and
    therefore sustains Commerce’s calculation of COP and CV based
    on 1995 and 1996 COM.
    10 It is not clear what effect using invoice date for
    date of sale will have on the use of sales and costs from
    outside the POR.
    Court No. 98-03-00487                                  Page 17
    III. Inclusion of U.S. Interest Expenses in Denominator of CEP
    Profit Ratio
    A.   Background
    The court found that Commerce’s calculation of CEP profit
    differed from the approach set out in the statute.     Thai
    Pineapple, 
    1999 WL 288772
    , at *7 (citing 19 U.S.C. §
    1677a(f)(1)-(2)(A) (1994)).    In the Final Results, Commerce
    calculated CEP profit by computing the ratio of total profit
    to total expenses and multiplying that ratio, on a
    transaction-by-transaction basis, by reported U.S. selling
    expenses.   Final Results, 63 Fed. Reg. at 7,395.    The court
    held that the statute intended that “profit would be allocated
    to U.S. sales in the same ratio as United States selling
    expenses are to total expenses.”     Thai Pineapple, 
    1999 WL 288772
    , at *7.    Furthermore, 19 U.S.C. § 1677a(f) requires
    that the “statutory ratio applied to ‘actual profit’ for
    purposes of calculating CEP profit must be calculated on a
    proportional basis.”    Id. at *8.   Commerce was directed to
    demonstrate on remand that the total expense denominator of
    the ratio to be applied to total actual profit to obtain the
    CEP profit adjustment contains all interest expenses
    (including those relating to U.S. sales) as required by 19
    Court No. 98-03-00487                                  Page 18
    U.S.C. § 1677a(f)(2)(C).     Thai Pineapple, 
    1999 WL 288772
    , at
    *9.
    B.    Discussion
    For cost of production purposes respondent reports total
    interest expenses covering inventory carrying costs and credit
    extension expenses.     See TPC Section D Questionnaire (Sept. 5,
    1996), at D-25, field 10.0, P.R. Doc. 11 (requesting net
    interest expense incurred by company in connection with
    production and sale of foreign like product).11    For price
    adjustment purposes, however, Commerce requires respondents to
    impute interest expenses separately for U.S. sales, even
    though companies may not account for such expenses separately,
    because, inter alia, relevant differences between U.S. and
    11Commerce states in the Remand Results that the annual
    interest amount reported as part of COP/CV reflects the costs
    of carrying merchandise in inventory and extending credit for
    the following reasons:
    The annual interest expense incurred by a company, and
    reported as an element of COP/CV, will reflect the extent
    to which the company does not immediately receive payment
    upon production of the merchandise, i.e., the opportunity
    cost of having the merchandise sit in inventory prior to
    sale, and of extending credit after the sale. To the
    extent that a company incurs a longer waiting period
    between production and payment, it will not have recourse
    to such funds and will generally incur greater financial
    expenses relative to receiving payment immediately upon
    production.
    RR, at 20-21.
    Court No. 98-03-00487                                  Page 19
    “home” market sales must be accounted for.     See e.g., 19
    U.S.C. § 1677b(a)(6)(C)(iii) (1994) (circumstances of sales
    adjustment).   It is this separate U.S. sales figure which TPC
    wishes included in the denominator.     It also appears true, as
    TPC alleges, that the manner of calculating U.S. imputed
    interest expenses may result in some cases in amounts which
    are not fully reflected in the total interest expenses figure
    which is used in the denominator of the CEP profit ratio.       See
    TPC Section C Questionnaire (Sept. 5, 1996), at C-21, field
    36.0, P.R. Doc. 11 (Commerce’s instructions regarding
    reporting U.S. credit expense).     Nonetheless, Commerce argues
    its method will avoid double counting, and that also appears
    to be true as to the normal case.
    Theoretically, the total expenses denominator would
    reflect the interest expenses captured in the U.S. sales
    expenses numerator specified in 19 U.S.C. § 1677a(f)(2)(B), as
    well as “home” market interest expenses, because the total
    expenses denominator is derived from a net unit figure based
    on all company interest expenses without regard to sales
    destination. The lines of computer program results cited by
    Commerce generally support the theory.     See RR, at 23 n.21
    (citing computer lines from Computer Program for Draft Results
    of Redetermination which show inclusion of interest expenses
    Court No. 98-03-00487                                  Page 20
    in COP, inclusion of interest expense in U.S. cost and CV, and
    inclusion of these costs in “Total Expenses” in the CEP profit
    calculation).12   The issue is whether there is some peculiarity
    of this case that belies the relevancy of the theory.
    TPC has not established that there is any great
    discrepancy here.   For example, it does not demonstrate a
    distortion caused by differing expenses over time.     Nor does
    it allege that in this case there can be no double counting
    because it had no or little actual U.S. interest expenses, but
    only imputed U.S. expenses.13   Plaintiff alleges nothing to
    counter Commerce’s reasoning on this point.   Accordingly, the
    court sustains Commerce’s CEP profit calculation.
    IV. Assessment rate for entries made after the final LTFV
    determination
    A.   Background
    The remaining issue on remand relates to the propriety of
    Commerce’s assessment rate calculations.   Commerce increased
    the cash deposit rate for entries of subject merchandise made
    after the final less than fair value (“LTFV”) determination,
    12 There was no change in the draft margin program from
    the draft remand results to the final remand results. See
    Declaration of Gabriel Adler (Nov. 24, 1999), at ¶ 3, Attach.
    2 of Commerce’s letter to the court dated Nov. 29, 1999.
    13 The court does not address whether these are truly
    distortive situations.
    Court No. 98-03-00487                                  Page 21
    but before the International Trade Commission (“ITC”) final
    affirmative injury determination.     Remand Results, at 2.     This
    rate was higher than the estimated duty rate from the
    preliminary LTFV determination.     Compare Notice of Amended
    Preliminary Determination: CPF From Thailand, 
    60 Fed. Reg. 9,820
    , 9,821 (Dep’t Commerce 1995) (all others rate 3.92
    percent) with Final Determination of Sales at LTFV: CPF From
    Thailand, 
    60 Fed. Reg. 29,553
    , 29,571 (Dep’t Commerce 1995)
    (all others rate 25.76 percent).14    The statute establishes a
    cap period for the assessment rate on entries made between
    Commerce’s preliminary LTFV determination and the ITC’s final
    affirmative injury determination.     See 19 U.S.C.A. § 1673f(a)
    (West Supp. 1999).
    The court remanded the issue regarding assessment rates
    during the cap period to allow the parties an adequate
    opportunity to address the issue.     Thai Pineapple, 
    1999 WL 288772
    , at *2.   TPC argues that Commerce erred in adopting the
    14    The amended preliminary LTFV determination was
    published on February 22, 1995, the final determination was
    published on June 5, 1995, and the ITC’s final affirmative
    injury determination was published on July 19, 1995. See CPF
    From Thailand, 60 Fed. Reg. at 9,820 (notice of amended
    prelim. determination); CPF From Thailand, 60 Fed. Reg. at
    29,553 (final determination of sales at LTFV); CPF From
    Thailand, 
    60 Fed. Reg. 37,073
     (ITC 1995) (ITC determination of
    material injury).
    Court No. 98-03-00487                                   Page 22
    second and higher assessment rate as the cap for entries made
    after the final determination, but before the ITC’s final
    injury determination.   TPC contends that the statute requires
    that Commerce cap the amount of duties collected at the rate
    established in the preliminary LTFV determination.
    B.   Discussion
    Commerce’s longstanding practice has been to calculate
    separate assessment rates during the cap period: one for the
    time between the preliminary and final determination, and
    another between the final determination and the ITC’s final
    determination.15   That the practice is longstanding is not
    sufficient to justify its application, however, it is also
    reasonable.   See Mitsubishi, 
    15 F. Supp.2d at 813-14
    (approving Commerce’s test because it was both longstanding
    and consistent with the law); cf. Sonco Steel Tube Div. v.
    United States, 
    12 CIT 745
    , 749-52, 
    694 F. Supp. 959
    , 962-65
    15 Commerce’s expression of this policy dates back to
    1986.   See Antidumping Duties; Proposed Rule, 
    51 Fed. Reg. 29,046
    , 29,051 (Dep’t Commerce 1986) (“dumping margin
    established in the Secretary’s final determination becomes the
    maximum amount which the Secretary may assess on entries made
    between publication of that determination and the publication
    of the Commission’s final affirmative determination);
    Antidumping Duties; Final Rule, 
    54 Fed. Reg. 12,742
    , 12,757
    (Dep’t Commerce 1989) (“For an entry made after the final
    determination, the cash deposit or bond is set by the
    Department’s final determination.”).
    Court No. 98-03-00487                                 Page 23
    (1988) (rejecting ITA argument regarding longstanding practice
    because practice not explained).
    The statutory section at issue is the “Deposit of
    estimated antidumping duty under section 1673b(d)(1)(B) of
    this title," which provides as follows:
    If the amount of a cash deposit, or the amount
    of any bond or other security, required as security
    for an estimated antidumping duty under section
    1673b(d)(1)(B) of this title is different from the
    amount of the antidumping duty determined under an
    antidumping duty order published under section 1673e
    of this title, then the difference for entries of
    merchandise entered, or withdrawn from warehouse,
    for consumption before notice of the affirmative
    determination of the Commission [ITC] under section
    1673d(b) of this title is published shall be —
    (1) disregarded, to the extent that
    the cash deposit, bond, or other security
    is lower than the duty under the order, or
    (2) refunded or released, to the extent
    that the cash deposit, bond, or other security
    is higher than the duty under the order.
    19 U.S.C.A. § 1673f(a).   Commerce’s regulation, in effect
    during the first administrative review, states the
    Department’s interpretation of this section.   See 
    19 C.F.R. § 353.23
     (1996).   It provides that if the duties assessed in
    either the preliminary or final determination by Commerce
    Court No. 98-03-00487                                  Page 24
    differ from the duties assessed in an administrative review,
    Commerce will instruct Customs accordingly.16
    Section 1673b(d) addresses the effect of Commerce’s
    preliminary determination in the LTFV investigation.     19
    U.S.C. § 1673b(d) (1994).   Under section 1673b(d), if
    Commerce’s preliminary determination is affirmative, Commerce
    estimates the weighted average dumping margin for exporters
    and producers individually investigated, and determines an
    all-others rate.   19 U.S.C. § 1673b(d)(1)(A)(i)-(ii).
    16   The regulation states in relevant part:
    If the cash deposit or bond required under the
    Secretary’s affirmative preliminary or affirmative final
    determination is different from the dumping margin the
    Secretary calculates under § 353.22 [administrative
    review of orders and suspension agreements], the
    Secretary will instruct the Customs Service to disregard
    the difference to the extent that the cash deposit or
    bond is less than the dumping margin, and to assess
    antidumping duties equal to the dumping margin calculated
    under § 353.22 if the cash deposit or bond is more than
    the dumping margin.
    
    19 C.F.R. § 353.23
     (1996) (emphasis added).
    The current version of this regulation, 
    19 C.F.R. § 351.212
    (d) (1999), differs slightly from the 1996 version.
    The 1999 version includes a description of the provisional
    measures deposit cap in countervailing duty cases. The 1999
    version also clarifies that the duties assessed under the
    preliminary or final determination are “provisional duties,”
    while the duties assessed in an administrative review are
    “final duties.” Otherwise, there has been no substantive
    change to this regulation.
    Court No. 98-03-00487                                 Page 25
    Commerce then orders the posting of a cash deposit, bond, or
    other security, and the suspension of liquidation of entries.
    19 U.S.C. § 1673b(d)(1)(B)-(2).    Pursuant to 19 U.S.C. § 1673d
    (1994), at the time of Commerce’s final affirmative
    determination, Commerce again determines the estimated
    weighted average dumping margin and orders the posting of a
    cash deposit, bond, or other security on entries of subject
    merchandise in an amount based on the estimated weighted
    average dumping margin or the estimated all-others rate.    19
    U.S.C. § 1673d(c)(1)(B)(i)-(ii).
    The court has previously determined that nothing in
    section 1673f(a) prevents Commerce from applying two different
    assessment caps and, indeed, that this practice is reasonable
    and in accordance with law.   See Daewoo Elecs. Co. v. United
    States, 
    13 CIT 253
    , 
    712 F. Supp. 931
     (1989), aff’d in part,
    rev’d on other grounds, 
    6 F.3d 1511
     (Fed. Cir. 1993).17    The
    plaintiff in Daewoo presented the same types of arguments as
    TPC does here, asserting that the language of section 1673f(a)
    requires that the assessment rate be capped at the rate
    17    Daewoo interpreted the 1988 version of the statute.
    For the reasons discussed herein, the differences between the
    1994 and 1988 statutory sections at issue are inconsequential.
    Therefore the court finds that the differences in the statute
    do not affect the Daewoo court’s analysis. All references to
    the statute will be to the 1994, or most recent version.
    Court No. 98-03-00487                                   Page 26
    established in the preliminary determination.     Daewoo, 13 CIT
    at 275, 
    712 F. Supp. at 951
    .   The actual assessment of
    antidumping duties does not occur until Commerce conducts its
    first administrative review of entries subject to an
    antidumping order.   Id. at 276, 
    712 F. Supp. at 952
    .     The
    court in Daewoo held that 19 U.S.C. § 1673f(a) does not
    “impose a limitation on the actual assessment rate by the
    rates established in the ITA preliminary determination, but
    requires only that the amount of duties assessed on entries
    made prior to the ITC final determination should be
    ‘disregarded, to the extent the cash deposit collected is
    lower than the duty.’” Id. (quoting 19 U.S.C. § 1673f(a)(1)
    (1988)).
    Section 1673b(d) authorizes Commerce to order the
    suspension of liquidation and the collection of a cash
    deposit, bond, or other security, pursuant to the Department’s
    preliminary affirmative determination.   19 U.S.C. § 1673b(d).
    In Daewoo, the court found that the reference to 19 U.S.C. §
    1673b(d)(2) in 19 U.S.C. § 1673f(a) did not “limit Commerce’s
    authority to adjust those preliminary rates in their
    subsequent final determination in LTFV investigations.”
    Daewoo, 13 CIT at 277, 
    712 F. Supp. at 952
    .     The court also
    noted that the legislative history to 19 U.S.C. § 1673b(d)(2)
    Court No. 98-03-00487                                  Page 27
    supported the conclusion that the preliminary deposit rates
    could be adjusted when more accurate information became
    available.   Id. (citing S. Rep. No. 96-249, at 65 (1979),
    reprinted in 1979 U.S.C.C.A.N. 381, 451).     Moreover, 19 U.S.C.
    § 1673d(c)(1)(C) authorizes Commerce to order the suspension
    of liquidation and the posting of the cash deposit after a
    final affirmative determination where there has been a
    negative preliminary determination.     Section 1673d(c)(1)(C)
    references the authorization provision of section 1673b(d)(2)
    regarding the suspension of liquidation.     In Daewoo, the court
    held that the reference to this authorization provision in
    section 1673b(d) “indicates that that provision granted
    Commerce a continuing authority to suspend liquidation and to
    collect estimated duty deposits.”     Daewoo, 13 CIT at 277, 
    712 F. Supp. at 953
    .
    TPC maintains that Daewoo was wrongly decided, based on a
    plain reading of 19 U.S.C.A. § 1673f(a).     Relying on Chevron,
    
    467 U.S. 837
    , TPC asserts that the court erred when it looked
    to legislative history because the statute is clear,
    preventing the need to look beyond its plain language.     The
    court does not agree.   As noted by Commerce, the statute is
    silent with regard to the application of a cap between the
    time of Commerce’s final determination and the ITC’s final
    Court No. 98-03-00487                                     Page 28
    determination.     The court in Daewoo therefore properly
    considered the legislative history in determining that
    Commerce’s practice was in accordance with law.
    In Daewoo, the court carefully analyzed the interplay of
    section 1673f(a) with sections 1673b and 1673d, as well as the
    overall structure and purpose of the statute.        Daewoo, 13 CIT
    at 276-77, 
    712 F. Supp. at 952-53
    .        The court noted that
    plaintiff’s arguments ignored “the provisional nature of
    duties which are imposed as a result of the final
    determination and which also serve merely as estimated duty
    until the actual assessment rates are established as a result
    of the administrative review.”     Id. at 278, 
    712 F. Supp. at 953
    .     Plaintiff’s interpretation of 19 U.S.C. § 1673f(a) in
    Daewoo would have rendered “meaningless the meticulous
    calculations required under the Act in both the final
    determinations of LTFV investigations and final results of the
    first administrative review.”     Id.18
    18
    As noted by Commerce in one of its early applications
    of the two-cap policy, the policy results in a more accurate
    assessment of estimated duties.
    [B]ecause the dumping margin established in the final
    determination is based on verified information afte[r]
    all the parties have had an opportunity to comment, it is
    a better estimate of the degree of price discrimination
    than the preliminary deposit rate, which was based only
    (continued...)
    Court No. 98-03-00487                                Page 29
    TPC alternatively argues that the changes made to the
    statute, pursuant to the Uruguay Round Agreements Act
    (“URAA”), Pub. L. No. 103-465, 
    108 Stat. 4809
     (1994), require
    that Commerce change its interpretation of section 1673f(a).
    The court finds that the changes to the relevant statutory
    provision were minor, and do not undercut Commerce’s practice.
    The changes made to 19 U.S.C.A. § 1673f(a)(1)-(2), by
    amendment in 1996, are inconsequential.   For example, the
    amendment replaced the words "cash deposit" for "cash deposit,
    bond, or other security."   Compare 19 U.S.C.A. § 1673f(a)(1)-
    (2) (West Supp. 1999) with 19 U.S.C. § 1673f(a)(1)-(2) (1988).
    The amendments made to 19 U.S.C. § 1673b(d) were also
    minor.   The subsection was restructured and renumbered, and
    the 1994 version states with greater clarity the Department’s
    18
    (...continued)
    on the best information available to the Department at
    that time. Accordingly, once the final determination is
    published, estimated duties are collected . . . until the
    order is issued at the final, rather than the preliminary
    rate.
    Color Television Receivers from Taiwan, 
    51 Fed. Reg. 46,895
    ,
    46,903 (Dep’t Commerce 1986) (final results of antidumping
    duty admin. rev.), aff’d in part and remanded in part, AOC
    Int’l Inc. v. United States, 
    13 CIT 716
    , 722-24, 
    721 F. Supp. 314
    , 319-21 (1989) (adhering to reasoning of Daewoo), rev’d on
    other grounds, Zenith Elecs. Corp. v. United States, 
    77 F.3d 426
     (Fed. Cir. 1996).
    Court No. 98-03-00487                                   Page 30
    responsibilities after a preliminary affirmative
    determination.   Compare 19 U.S.C. § 1673b(d) (1994) with 19
    U.S.C. § 1673b(d) (1988).   Likewise the 1994 amendments to 19
    U.S.C. § 1673d(c) do not alter the meaning of this section.
    Compare 19 U.S.C. § 1673d(c) (1994) with 19 U.S.C. § 1673d(c)
    (1988).   TPC makes much of the differences between section
    1673d(c)(1)(B) (1988) and section 1673d(c)(1)(B)-(C) (1994).
    Sections 1673d(c)(1)(B)-(C) of the statute state the effect of
    a final affirmative determination by Commerce.     The 1988
    version of the statute grouped together Commerce’s authority
    to order the suspension of liquidation and the posting of a
    cash deposit, bond, or other security, in cases where it made
    an affirmative final determination after a negative
    preliminary determination.19   19 U.S.C. § 1673d(c)(1)(B)
    (1988).   The current version of the statute states that in
    cases of a final affirmative determination, Commerce will
    order the posting of a cash deposit, bond, or other security.
    19 U.S.C. § 1673d(c)(1)(B) (1994).   In the following
    19   “(B) in cases where the preliminary determination by
    the administering authority under section 1673b(b) of this
    title was negative, the administering authority shall order
    under paragraphs (1) and (2) of section 1673b(d) of this title
    the suspension of liquidation and the posting of a cash
    deposit, bond, or other security.” 19 U.S.C. § 1673d(c)(1)(B)
    (1988).
    Court No. 98-03-00487                                 Page 31
    subsection, the statute provides that in cases of a negative
    preliminary determination, Commerce will order the suspension
    of liquidation under the authorization provision of section
    1673b.20   Id.
    TPC asserts that the differences in the 1994 statute
    require that the court’s reasoning in Daewoo be discarded.      In
    referring to situations where the preliminary determination is
    negative and the final determination is affirmative, the 1994
    statute only states that Commerce shall order the suspension
    of liquidation, without stating that Commerce shall order the
    posting of the cash deposit, bond, or other security.   The
    20    The statute currently reads, in relevant part:
    (c) Effect of final determination
    (1) Effect of affirmative determination by the
    administering authority
    If the determination of the administering authority
    under subsection (a) of this section is affirmative, then
    - . . .
    (B)(ii) the administering authority shall order the
    posting of a cash deposit, bond, or other security . . .
    for each entry of the subject merchandise in an amount
    based on the estimated weighted average dumping margin or
    the estimated all-others rate, whichever is applicable,
    and
    (C) in cases where the preliminary determination by
    the administering authority under section 1673b(b) of
    this title was negative, the administering authority
    shall order the suspension of liquidation under section
    1673b(d)(2) of this title.
    19 U.S.C. § 1673d(c) (1994).
    Court No. 98-03-00487                                  Page 32
    court does not agree that this formulation alters the holding
    in Daewoo.   New section 1673d(c) is more properly read to mean
    that regardless of the preliminary determination result,
    Commerce orders the posting of a cash deposit, bond, or other
    security at the time of a final affirmative determination.
    Commerce does not need to order the suspension of liquidation
    in a case where the preliminary determination was affirmative,
    because liquidation would already have been suspended under
    section 1673b(d)(2).    19 U.S.C. § 1673b(d)(2).   Section
    1673d(c)(1)(C) singles out suspension of liquidation in
    referring to situations where the preliminary determination
    was negative and the final determination affirmative, because
    in such a case the suspension of liquidation would not have
    already occurred.   See 19 U.S.C. § 1673d(c)(1)(C).    Therefore,
    the change to this section of the statute has not altered the
    basic meaning of the provision, rather, it has clarified
    Commerce’s responsibilities upon making a final affirmative
    determination.
    None of the changes to the statute regard the
    Department’s assessment rate capping policy for entries made
    after Commerce’s final LTFV determination, but before the
    ITC’s final injury determination.    Commerce’s interpretation
    and application of 19 U.S.C.A. § 1673f(a) is reasonable.     If
    Court No. 98-03-00487                                     Page 33
    Congress objected to Commerce’s longstanding practice
    regarding assessment caps, and intended to change that
    practice, it likely would have expressed such an intent in the
    legislative history, if not within the statutory language
    itself.   The House Report to the URAA states that sections
    1673b and 1673d (sections 733 and 735 of the Tariff Act) were
    amended to conform U.S. law more closely to the Uruguay Round
    Agreement, and does not indicate any substantive change in
    U.S. practice.     H.R. Rep. 103-826(I), at 50-51 (1994),
    reprinted in 1994 U.S.C.C.A.N. 3773, 3822-23.
    TPC cites no legislative history to support its position
    that the 1994 URAA amendments reflect an intent to change
    Commerce’s practice under section 1673f(a).     Because
    Commerce’s practice of applying two assessment cap rates is
    reasonable, conforms to the statute, and results in a more
    accurate assessment rate, and because TPC offers no weighty
    arguments in its favor, TPC does not persuade this court that
    Commerce’s policy should be changed.
    For the foregoing reasons, the court upholds Commerce’s
    capping the assessment rate between the time of the final LTFV
    determination and the ITC’s final injury determination at the
    final LTFV rate.
    Court No. 98-03-00487                                     Page 34
    Conclusion
    The court finds that there was no reason for Commerce to
    abandon its presumption of using invoice date for date of
    sale, and therefore reverses Commerce on this issue.       Commerce
    must use invoice date for date of sale purposes on remand.
    The court upholds Commerce’s use of fiscal year costs for
    COP and CV purposes, and the calculation of CEP profit, as
    well as Commerce’s practice regarding the assessment rate
    applied during the cap period.
    Remand results are due within 30 days.      Objections
    thereto are due 15 days thereafter and responses 11 days
    thereafter.
    _______________________
    Jane A. Restani
    JUDGE
    Dated:   New York, New York
    This 10th day of February, 2000.