CIT Says Commerce Not Required to Limit AFA to Sales Affected by Exporter's Omissions

Chandan filed the motion to claim that Judge Timothy Stanceu failed to address all of its arguments against the AFA rate. The exporter said the use of AFA should be limited to U.S. sales affected by the company's omissions. Stanceu said that while Commerce had the discretion to limit the use of AFA in this way, the statute doesn't require such action and that the use of total AFA was supported.

In the review, Commerce said Chandan repeatedly misreported its foreign sales information and the costs of production for those foreign sales. The court noted that Chandan's responses also “contained additional deficiencies related to its reporting of gross unit price, quantity discounts, other discounts, and duty refunds,” which the company didn't correct when given the opportunity (see 2312110043).

Chandan moved for reconsideration of the decision, arguing that any of its questionnaire errors were inconsequential and "anyway remedial from the accepted record" (see 2401110029). Stanceu said Chandan "appears" to obey, arguing that since missing comparison market sales could only have been window period sales outside the review period, those sales would only hinder Commerce's margin calculation if no comparison market sales could be found "without resort to a window period month that did not fall within the period of review." As a result, only the U.S. sales affected by the omissions should be at an AFA rate.

Stanceu rejected this claim, finding that even if the missing comparison market sales wouldn't have affected the individual rates for 99.6% of the company's U.S. sales, "the court still could not agree that the Tariff Act required Commerce to use" the company's sales database to calculate Chandan's margin.

The court said three provisions of the Tariff Act of 1930 support this provision, the first of which, 19 U.S.C. Section 1677m(e)(3), compels Commerce to use incomplete information if it's not so incomplete that it can't serve as a reliable basis for reaching the "applicable determination." While this seemingly favors Chandan's claim, the provision also requires the interested party to have acted to the best of its ability, Stanceu noted. Since the court already found Chandan to not have acted to the best of its ability, this provision didn't save the exporter.

Another provision, Section 1677m(d), also supports Commerce's conclusion, since the error was brought to Chandan's attention and the company was allowed to correct it. This section expressly gives the agency "the discretion not to" use the exporter's information to conduct its own margin calculation.

Lastly, Section 1677e(a), which permits the use of AFA when a party fails to provide information in the "form and manner requested," additionally calls for the rejection of Chandan's claims, Stanceu said. This provision doesn't "confine the use of the facts otherwise available to a situation where 'necessary information is not available on the record,'" the decision said. While Commerce could have used a more limited version of AFA, "the court must review the Department’s determination according to the standard of review."

In applying this standard, "the court cannot conclude on this record that the findings upon which Commerce acted were unsupported by substantial record evidence or that Commerce otherwise acted contrary to law," the decision said.

(Chandan Steel Limited v. United States, Slip Op. 24-105, CIT # 21-00540, dated 10/02/24; Judge: Timothy Stanceu; Attorneys: Peter Koenig of Squire Patton for plaintiff Chandan Steel Limited; Geoffrey Long for defendant U.S. government)