Jindal Poly Films Limited of India v. United States

365 F.Supp.3d 1379

JINDAL POLY FILMS LIMITED OF INDIA (a.k.a. Jindal Poly Films, Ltd. (India)), Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 19-31

Court No. 18-00038

United States Court of International Trade.

Dated: March 11, 2019

Stephen W. Brophy, Husch Blackwell, LLP, of Washington, DC, argued for Plaintiff. With him on the brief was Nithya Nagarajan.

Sonia Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Kristen E. McCannon, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

OPINION AND ORDER

Barnett, Judge:

Plaintiff Jindal Poly Films Limited of India (a.k.a. Jindal Poly Films Ltd. (India) ) ("Plaintiff" or "Jindal") challenges certain aspects of the U.S. Department of Commerce's ("Commerce" or "the agency") final results in the administrative review of the antidumping duty order on polyethylene terephthalate film, sheet, and strip ("PET film") from India. See Polyethylene Terephthalate Film, Sheet, and Strip from India , 83 Fed. Reg. 6,162 (Dep't Commerce Feb. 13, 2018) (final results on antidumping duty admin. review; 2015-2016) (" Final Results "), ECF No. 18-4, and the accompanying Issues and Decision Mem., A-533-824 (Feb. 6, 2018) ("I & D Mem."), ECF No. 18-5 ;¹ Compl., ECF No. 6. Plaintiff argues that Commerce's decision to deny Jindal two post-sale price adjustments to its home market sales lacks adequate explanation and analysis, is not supported by substantial evidence, and is contrary to law; Commerce unlawfully failed to issue a supplemental questionnaire to Jindal to seek additional information on the two post-sale price adjustments that Commerce denied; and Commerce violated Jindal's due process rights by depriving it of an opportunity to meaningfully comment on Commerce's preliminary results. See Mot. for J. Upon the Agency R. Pursuant to USCIT Rule 56.2 of Pl. Jindal Poly Films Ltd. of India (a.k.a. Jindal Poly Films Ltd. (India) ) and Mem. in Supp. of Pl.'s Rule 56.2 Mot. for J. on the Agency R. ("Pl. 's Br."), ECF No. 23 ; Confidential Reply of Pl. Jindal Poly Films Limited of India (a.k.a. Jindal Poly Films Ltd. (India) ) ("Pl.'s Reply"), ECF No. 27.

Defendant United States ("Defendant" or "the Government") urges the court to sustain the agency's Final Results . See generally Confidential Def.'s Resp. to Pl.'s Mot. for J. on the Agency R. ("Def.'s Br.") at 10-14, 17-23, ECF No. 26. Defendant-Intervenors DuPont Teijin Films, Mitsubishi Polyester Film, Inc., and SKC, Inc. did not respond to Plaintiff's arguments. See Letter to Court (Sep. 17, 2018), ECF No. 24. The court heard oral argument on February 13, 2019. See Docket Entry, ECF No. 43. For the reasons discussed below, the court remands the Final Results .

BACKGROUND

Jindal was one of two mandatory respondents in the 2015-2016 administrative review of the antidumping duty order on PET film from India. See Selection of Respondents for Individual Examination (Nov. 2, 2016) at 5, CR 3, P.R. 16, CJA Tab 4, PJA Tab 4. In its response to Section B of Commerce's initial questionnaire, Jindal stated that it provides the following post-sale billing adjustments, discounts, and rebates to its customers:

Short Billing Adjustment (BILLADJ1H)

Excess Billing Adjustment (BILLADJ2H)

Early Payments Discount (EARLYPYH)

Quantity Discount (REBATE1H)

Financing Charge Discount (REBATE3H)

VAT/CST Discount (REBATE4H)

Monthly Rebate & Other Credit Notes (REBATE5H)

Exclusive Dealer Discount (REBATE6H)

Initial Sec. B and C Questionnaire Resp. of Jindal (Dec. 20, 2016) ("Sec. B Resp.") at 27-38, CR 19-21, PR 43, CJA Tab 5, Suppl. CJA Tab 1, PJA Tab 5, Suppl. PJA Tab 1. Jindal claimed that its post-sale discounts are "within the scope of accepted price adjustments" because they "are known to its customers at the time the sale is made" and "these adjustments have been granted by [Commerce] in previous administrative reviews with respect to Jindal." Id. at 32. Jindal provided a sample copy of its sales policy that included the terms of the claimed adjustments as well as various exhibits purporting to reflect sample calculations of the rebates and copies of credit notes. See id. , Exs. B-16—B-26.

Commerce published its preliminary results on August 7, 2017. Polyethylene Terephthalate Film, Sheet, and Strip from India , 82 Fed. Reg. 36,735 (Dep.'t Commerce Aug. 7, 2017) (prelim. results and partial rescission of antidumping duty admin. review; 2015–2016) ( "Preliminary Results "). In the Decision Memorandum accompanying the Preliminary Results , Commerce stated that "in accordance with 19 C.F.R. [§] 351.401(c), we made adjustments for discounts and rebates." Decision Mem. for Prelim. Results and Partial Rescission of Antidumping Duty Admin. Review (July 31, 2017) at 12, PR 68, CJA Tab 7, PJA Tab 7; see also id. at 7. Commerce did not identify therein which normal value price adjustments it made or provide further discussion or analysis regarding Plaintiff's claimed adjustments. Commerce released the home market Statistical Analysis Software ("SAS") program log in conjunction with its preliminary analysis memorandum, which provided the following information:

7809 HMGUPADJ = (BILLADJ1H + BILLADJ2H + ...); /* Price adjustments to be added to HMGUP */

7810 HMDISREB = EARLPYH + REBATE5H; /* Discounts, rebates & other price */

7811 /* adjustments to be subtracted from HMGUP - Post-sale price adjustments are not allowed */

Jindal's Prelim. Home Market SAS Program Log (Aug. 11, 2017) ("Prelim. SAS Log") at 91, CR 126, CJA Tab 9, PJA Tab 9; see also Analysis Mem. for the Prelim. Results (July 31, 2017) at 4, CR 63, PR 123, CJA Tab 8, PJA Tab 8.

On August 23, 2014, Plaintiff filed a letter with Commerce asking the agency to either explain why it had denied Plaintiff's reported price adjustments or issue a supplemental questionnaire to Plaintiff to "clarify the record of this case" since Commerce had granted Jindal's reported price adjustments "in all prior reviews." Req. for Clarification of Prelim. Results of Review (Aug. 23, 2017) ("Pl.'s Req. for Clarification") at 2, PR 65, CJA Tab 10, PJA Tab 10. Commerce responded that it had inadvertently omitted a footnote from its preliminary memoranda indicating that Jindal "did not meet the criteria ... for post-sale rebates and adjustments" because its responses to the agency's initial questionnaire "did not provide information on any of the [ ] factors" set forth in Modification of Regulations Regarding Price Adjustments in Antidumping Duty Proceedings, 81 Fed. Reg. 15,641 (Dep't Commerce, Mar. 24, 2016) (final rule) ("Final Modification "). Letter from Commerce to Jindal Re: 2015-2016 Admin. Review of PET Film from India (Sept. 25, 2017) ("Sept. 25, 2017 Letter") at 1 & nn.1-2, PR 74, CJA Tab 11, PJA Tab 11.

Two days later, Plaintiff submitted its case brief to the agency arguing that (1) Commerce's preliminary decision to deny Jindal's post-sale price adjustments without adequate explanation was arbitrary and capricious and unsupported by substantial evidence; (2) Jindal's Section B responses addressed the Final Modification factors; and (3) Commerce was statutorily required to issue a supplemental questionnaire to provide Jindal an opportunity to cure any purported deficiencies in its responses. Admin. Case Br. (Sept. 27, 2017) ("Pl.'s Admin. Case Br.") at ECF pp. 110-11, PR 76, CJA Tab 12, PJA Tab 12. Jindal requested that Commerce either explain the reasons for denying its reported post-sale price adjustments and permit supplemental briefing to address the issue or issue a supplemental questionnaire to Jindal. Id. at ECF p. 112-13.

Commerce published its final results on February 13, 2018. See Final Results . Commerce explained that it granted the following post-sale price adjustments in accordance with the Preliminary Results : Payment Discount (EARLPYH), Short Billing Adjustment (BILLADJ1H), Excess Billing Adjustment (BILLADJH2H) and Monthly/Other Credit Notes Rebate (REBATE5H). Analysis Mem. for the Final Results (Feb. 6, 2018) ("Final Analysis Mem.") at 2-4, CR 144, PR 82, CJA Tab 13, PJA Tab 13. For the final results, Commerce also granted the Quantity Discount (REBATE1H) and VAT/CST Discount (REBATE4H) "because: 1) the terms were set prior to the sales, 2) proper timing of the adjustment, and 3) a showing of legitimate transactions." I & D Mem. at 3; see also Final Analysis Mem. at 1, 5. However, Commerce denied two remaining adjustments—Financing Charges Discount (REBATE3H) and Exclusive Dealer Discount (REBATE6H)—stating:

We continue to determine that the information on the administrative record does not meet the criteria spelled out in the Final Modification . The Financing Charges Discount does not meet the criteria (1) where terms and conditions were set prior to sale; (3) the timing of the adjustment; and (5) any other factors tending to reflect on the legitimacy of this claimed adjustment, specifically the business sense of this adjustment. The Exclusive Dealer Discount also does not meet the criteria (1) where terms and conditions were set prior to sale; (3) the timing of the adjustment; and (5) any other factors tending to reflect on the legitimacy of this claimed adjustment, specifically the business sense of this adjustment.... [T]he burden is on the respondent [to] provide information relevant to support its questionnaire response.

Final Analysis Mem. at 6.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012),² and 28 U.S.C. § 1581(c). The court will uphold Commerce's determination if it is supported by substantial evidence on the record and in accordance with law. 19...