Clearon Corp. v. United States ( 2013 )

Slip Op. 13-22
UNITED STATES COURT OF INTERNATIONAL TRADE
CLEARON CORPORATION and
OCCIDENTAL CHEMICAL
CORPORATION,
Plaintiffs,
v.
Before: Richard K. Eaton, Judge
UNITED STATES,
Court No. 08-003 64
Defendant,
and
ARCH CHEMICALS, INC.,
Defendant-Intervenor.
OP]NION
['I'he Departrnent of Commerce’s Final Results of Redetennination are susta.ined.]
Dated: February 20, 2013
Gibson, Dunn & Crutcher, LLP (John C. W00d and Danz'el J. Plaine), for pIaintiH``s.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. David.s'on, Dix‘ector,
Franklin E. White, Jr., Assistant Direotor, Commercial Litigation Branch, Civil Division, United
States Departrnent of Justice (David F. D ’Aless_andris); Off'lce of the Chief Counsel for Import
Administration, United States Departrnent of Commerce (David Richaraz``son), of counsel, for
defendant
L¢M Oj‘ices of Peggy A. Clarke (Peggy A. Clarke), for defendant-intervenor.
Eaton, Judge: Before the court are the Final Results of Rodetennination, pursuant to a
renumd order issued by the court on Novernber 18, 201 1, involving the Final Result and
Court No. 08-00364 Page 2
Amended Final Results of the Second Adrninistrative RevieW of the antidumping duty order on
chlorinated isocyanur_'atesl ("isos") from the People’s Republic of China ("PRC"). See Final
Results of Redetermination (Dep’t of Commerce Mar. l9, 20l2) (ECF Dkt. No. 79) ("Remand
Results"); Clearon Corp. v. United States, 35 CIT _, Slip Op. ll-142 (Nov. 18, 2011)
("Clearon Il")z; see also Chlorinated Isos from the PRC, 73 Fed. Reg. 52,645 (Dep’t of
Commerce Sept. 10, 2008) (fmal results of antidumping administrative review); Chlorinated Isos
from the PRC, 73 Fed. Reg. 62,249 (Dep’t of Commerce Oct. 20, 2008) (amended final results of
antidumping administrative review) (collectively, "Final Results").
By the remand order, the Department of Commerce ("Commerce” or "the Department")
was directed to reexamine its selection of surrogate data to value the factors of production of
respondents Hebei Jiheng Chemical Corporation, Ltd. ("Jiheng") and Nanning Chemical
Industry Co. Ltd. (“Nanning"), including the Indian surrogate data used to value urea and steam
coal, and to reconsider and explain its selection of anhydrous ammonia to value an ammonia gas
by-product offset credit for Jiheng. Clearon II, 35 CIT at _, Slip Op. ll-142, at 30-31.
In the Remand Resu1ts, Commerce continues to find that it used the best available
information to value the factors of production and Jiheng’s by-product offset, and that its
conclusions are supported by substantial evidence. Remand Results at 2.
For the reasons set forth below, the Remand Results are sustained.
l "Chlorinated isocyanurates are derivatives of cyanuric acid, described as
chlorinated s-triazine triones. . . . [They are] available in powder, granular, and tableted fonns."
Arch Chems., Inc. v. United States, 33 CIT _, _, Slip Op. 09-OOO7l, at 3 n.l (July 13, 2009)
(not reported in the F ederal Supplement) (intemal quotation marks and citation omitted).
2 In Clearon I, the court denied Commerce’s December 14, 2009 motion to dismiss
certain counts in plaintiffs’ Complaint. Clearon Corp. v. United States, 34 CIT _, 717 F. Supp.
2d 1366 (2010) ("Clearon 1").
Court No. 08-00364 Page 3
BACKGROUND
In late 2008, Commerce issued the Amended Final Results of the Second Administrative
Review of the antidumping duty order on chlorinated isocyanurates from the PRC, in which
Commerce assigned dumping margins to respondents Jiheng and Namijng of 0.90% and 54.86%,
respectively. See Final Results, 73 Fed. Reg. at 62,250. The Final Results cover the period of
review ("POR") June l, 2006 through May 3l, 2007, and incorporate by reference the
Department’s issues and Decision Memorandum. See Issues & Decision Mem. for the 2006-
2007 Admin. Review of Isos from the PRC (Dep’t of Commerce Sept. 5, 2008) ("Issues & Dec.
Mem.").
On April l7, 2009, plaintiffs Clearon Corporation and Occidental Chemical Corporation,
domestic producers of isos, filed a motion for judgment on the agency record pursuant to USCIT
Rule 56.2. Clearon lI, 35 CIT at _, Slip Op. ll-l42, at 2. Plaintiffs’ motion challenged
Commerce’s (l) selection of surrogate values for urea; (2) selection of surrogate values for steam
coal; and (3) valuation of Jiheng’s waste ammonia gas by-product credit. On December 14,
2009, Commerce filed a motion to dismiss certain counts in plaintiffs’ Complaint. The court
denied defendant’s motion in Clearon I. Clearon Corp. v. United States, 34 CIT _, 717 F.
Supp. 2d 1366 (2010) (“Clearon 1"). Plaintiffs’ 56.2 motion was granted, in part, in Clearon II
and the case was remanded to Commerce on November 18, 201 l.
In its March 19, 2012 Remand Results, Commerce has again determined that: "(l) the
Indian import data are the best available information on the record for valuing urea; (2) the Tata
Energy Research institute ("TERI") data are the best available infonnation on the record for
valuing steam coal; and (3) the World Trade Atlas ("WTA") data for anhydrous ammonia are the
Court No. 08-OO364 Page 4
best available information on the record for valuing Jiheng’s ammonia gas by-product." Remand
Results at 2.
Plaintiffs dispute each of these determinations Comments of Clearon Corp. &
Occidental Chem. Corp. Regarding FinalResu1ts of Redeterrnination 2, 8, 12 (May 3, 2012)
(ECF Dkt. No. 90) ("Pls.’ Cmts."). Defendant, the United States, contends that the Remand
Results are consistent with the court’s instructions, are supported by substantial evidence, and
should be sustained. Def.’s Resp. to Pls.’ Comments 1 (May 25, 2012) (ECF Dkt. No. 96)
("Def.’s Resp."). Defendant-Intervenor, Arch Cheniicals, likewise contends that the Remand
Results should be sustained. Resp. of Arch Chems. to Clearon Corp. & Occidental Chemical
Corp.’s Comments 8 (May 25, 2012) (ECF Dkt. No. 94) ("Def.-Int.’s Resp.").
STANDARD OF REVIEW
"The court shall hold unlawful any deterrnination, fmding, or conclusion found . . . to be
unsupported by substantial evidence on the record, or otherwise not in accordance with laW." 19
U.S.C. § l5l6a(b)(l)(B)(i) (2006).
DISCUSSION
I. Legal Framework
The United States imposes duties on foreign-produced goods that are sold in the United
States at less-than-fair valued When determining whether the subject merchandise is being, or is
likely to be, sold at less-than-fair value, 19 U.S.C. § 1677b(a) requires Commerce to make "a fair
3 "lf the price of a good in the home market (‘norrnal value’) is higher than the
price for the same good in the United States (‘export price’), then the comparison produces a
positive number that indicates that dumping has occurred, and the magnitude of the number
determines the dumping margin." Clearon II, 35 CIT at _, Slip Op. ll-l42, at 5.
Court No. 08-00364 Page 5
] or constructed export price[§] and normal value." 19
comparison . . . between the export price[‘i
U.S.C. § l677b(a). "Commerce ordinarily determines the normal value of subject merchandise
of an exporter or producer from a non-market economy . . . country[é] ‘on the basis of the value
of the factors of production utilized in producing the merchandise.’” Shantou Red Garden
Foodstujj‘€o. v. United States, 36 CIT _, _, 815 F. Supp. 2d 131l, 1316 (2012) (quoting 19
U.S.C. § 1677b(c)_(l)). In doing so, Commerce seeks "to assess the ‘price or costs’ of factors of
production" of subject merchandise in a comparable market economy7 "in an attempt to
construct a hypothetical market value of that product" in the nonmarket economy. Nation F ord
Chem. Co. v. United States, 166 F.3d 1373, 1375 (Fed. Cir. 1999). The statute directs
Commerce to value the factors of production "based on the best available information regarding
the values of such factors in a market economy country." 19 U.S.C. § l677b(c)(l).
4 The "export price” is "the price at which the subject merchandise is first sold . . .
by the producer or exporter of the subject merchandise outside of the United States to an
unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the
United States, as adjusted." 19 U.S.C. § l677a(a).
5 The "constructed export price" is "the price at which the subject merchandise is
first sold . . . in the United States . . . by or for the account of the producer or exporter of such
merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted." 19 U.S.C. § l677a(b).
6 A "nonmarket economy country" is "any foreign country that [Commerce]
determines does not operate on market principles of cost or pricing sti'uctures, so that sales of
merchandise in such country do not reflect the fair value of the merchandise." 19 U.S.C. §
1677(1 8)(A). "Because it deems China to be a nonmarket economy country, Commerce
generally considers information on sales in China and fmancial information obtained from
Chinese producers to be unreliable for determining, under 19 U.S.C. § l677b(a), the normal
value of the subject merchandise." Shanghai Foreign Trade Enters. Co. v. United States, 28 CIT
480, 481, 318 F. Supp.``2d1339, 1341 (2004).
7 Section l677b(c)(4)(A) requires that Commerce "in valuing factors of production
. . . shall utilize, to the extent possible, the prices or costs of factors of production in one or more
``market economy countries that are . . . at a level of economic development comparable to that of
the nonmarket economy country."
Court No. 08-0O364 Page 6
II. Commerce’s Choice of a Surrogate Value for Urea
A. Urea Used in Agriculture Versus Chemical Production
The Department’s Final Results valued the urea input using Indian World Trade Atlas
("WTA") import data, which included data for Omani-sourced imports of urea into India. In
doing so, the Department rejected the use of prices for urea sold in the Philippines after fmding
the “domestic Philippine prices for urea not to be the best available information. . . because
these prices were for urea used as fertilizer and sold in 50-kg bags which were not product
specific to the urea used by respondents in this review." Issues & Dec. Mem. at 8.
In Clearon II, the court directed Commerce to "reexamine its determination with respect
to (l) whether urea used for agricultural purposes can be differentiated from urea used for
chemical production, and (2) any reason urea sold in fifty kilogram bags cannot be the source of
a surrogate price in this case." Clearon II, 35 CIT at _, Slip Op. 11-142, at 30.
Upon reexamination on remand, the Department has now "determined that the record
evidence supports finding that urea used for agricultural purposes should not be differentiated
from urea used for industrial purposes." Remand Results at 4 (emphasis added). In addition,
while the Department found that information on the record "supports the proposition that urea
has multiple uses," it did not indicate "that there are two separate and distinct markets." Remand
Results at 5.
As to the court’s direction to Commerce to reexamine whether urea sold in fifty kilogram
bags could be the source of a surrogate price in this case, on remand the Department found that
"the record does not contain any evidence that there are any differences in the physical
characteristics, packaging of``, and channels of trade/ selling functions for urea sold for different
uses to support a finding that there are two distinct markets for urea used for agricultural versus
Court No. 08-00364 Page 7
industrial applications." Remand Results at 5. Hence, Commerce has now determined that its
previous assertion that "the Philippine data were not specific to the type of urea used by the
respondents . . . [was] not supported by record evidence.” Remand Results at 5. Indeed, on
remand, the Department has found that "one of the two respondents in this administrative review
purchased urea in similar quantities [to the fifty kilogram bags]." Remand Results at 5.
Therefore, Commerce has now concluded that neither market segrnentation nor that the
Philippine urea was sold in fifty-kilogram bags presents an obstacle to the use of Philippine
prices as surrogate values.
Nonetheless, as discussed below, "[a]fter reviewing the record, the Departrnent continues
to fmd that the Indian data constitute the best available information on the record for valuing
urea." Remand Results at 6.
B. E valuation of Philippine Data and Comparison t'o Indian Data
In addition to directing Commerce to reexamine the manner in which Philippine urea was
sold, the court further directed Commerce to "[1] fully analyze the evidence presented by both
sides in reviewing its decision to exclude the Philippine data, [2] further examine the Philippine
data using the same criteria it employed in selecting the Indian data, [3] provide a complete
comparison of the two data sets, and [4] adequately explain how it has come to its fmal
deterrnination." Clearon II, 35 CIT at _, Slip Op. 11-142, at 30-31.
According to Commerce, when valuing the factors of production pursuant to 19 U.S.C. §
l677b(c)(l), "the Department’s stated practice [is] to choose surrogate values that represent
broad market-average prices, prices specific to the input, prices that are net of taxes and import
duties, prices that are contemporaneous with the POR, and publicly available non-aberrational
data from a single surrogate market-economy." Remand Results at 6-7. Using these criteria,
Court No. 08-00364 Page 8
Commerce reexamined the Philippine dataset and compared it to the Indian WTA data. In doing
so, Commerce found that the Philippine dataset, like the Indian dataset, ii.llfilled its selection
criteria, i.e., it represented a broad market-average; was specific to the urea input; was exclusive
of taxes; was contemporaneous with the POR; and was publicly available. Remand Results at 7-
8. The Departrnent further found that, although the Philippine retail average unit value was the
highest value on the record, it was not aberrational when compared to other potential surrogate
countries, but "[r]ather it constitutes the high end of a range of values." Remand Results at 8.
This being the case, Commerce found that “both sources of data could potentially be used in
valuing the input for urea." Remand Results at 16.
The Departinent, however, continues to argue for its use of the Indian data based on its
regulations Pursuant to 19 C.F.R. 351.408(0)(2), the Department "normally will value all
factors in a single surrogate country." 19 C.F.R. 351 .408(c)(2) (2007). For Commerce, this
regulation provides a sufficient basis for the use of data from India. Remand Results at 16-17;
Def.’s Resp. 3 ("Commerce will only introduce data from a secondary surrogate country into the
calculation if there were no primary surrogate value, or if the primary surrogate value was not
reliable based on record evidence.").
Here, "India is the primary surrogate country, where the surrogate values, contingent
upon availability, were obtained for the [other factors of production]. Accordingly, the
Department’s first preference in selecting surrogate value data . . . is publicly available Indian
data for the POR, where there is no evidence to show that the data are aberrational or otherwise
unreliable." Remand Results at 17; see also Def.’s Resp. 2 ("[B]ecause Commerce had selected
India as the primary surrogate country-a decision that has not been challenged in this
litigation-Commerce appropriately selected the Indian data as a surrogate value for urea as the
Court No. 08-00364 Page 9
best available information in preference to the Philippine data."). Tlierefore, based on its
regulation, Commerce concluded that "despite the fact that the Departrnent reversed its decision-
that the Philippine retail pricing data were not specific to the input of urea being used in the
production of the subject merchandise, the record evidence . . .' still supports a determination that
the Indian import data meet the Department’s criteria for best available information." Remand
Results at 17.
In disputing this decision, plaintiffs insist that the Department’s use of the "single
surrogate country" criteria as the tiebreaker was overly simplistic. Pls.’ Cmts. 3. Plaintiffs claim
that "[t]he Department’s task is not to select any data from its primary surrogate country that
meets certain minimum indicia of reliability; it is rather to select the data that are the ‘best
available’ on the record." Pls.’ Cmts. 3. Plaintiffs rely on this Court’s opinion in Dorbes).‘, Ltd.
v. United States for the proposition that the "‘best’ choice is ascertained by examining and
comparing the advantages and disadvantages of using certain data as opposed to other data."
Dorbest, Ltd. v. United States, 30 CIT 1671, 1675, 462 F. Supp. 2d l262, 1268 (2006).
Plaintiffs further argue that Commerce "fail[ed] to make the ‘complete comparison of the
two data sets’ required by the Court’s remand instructions," and failed "adequately [to] explain
how it has come to its final determination." Pls.’ Cmts. 2. In other words, while conceding that
the Department fully examined the Philippine data using the same criteria it employed in
selecting the Indian data, plaintiffs argue that Commerce failed to actually compare the
Philippine dataset to the Indian data. In plaintiffs view, "it is plain that the only ‘comparison’
that the Departrnent performed of the Indian and Philippine urea price data was to a set of
minimum reliability criteria." Pls.’ Cmts. 3. To plaintiffs, this "exercise may lay the
groundwork for a comparison, by confirming that both data sets are usable, but certainly does not
Court No. 08-00364 Page 10
constitute the ‘complete comparison of the two data sets’ that was required by this Court’s
remand decision." Pls.’ Cmts. 3. Plaintiffs continue that "[h]ad the Department conducted the
required comparative assessment, there are several relevant differences between the Indian and
Philippine urea price data that would have been pertinent to a determination of the ‘best available
information."’ Pls.’ Cmts. 4. The differences identified by plaintiffs are (l) "the Philippine data
reflects domestic sales rather than import transactions,” (2) "the greater specificity of the
Philippine data [which] is specific to urea sold in 50-kilogram bags," and (3) "the very different
structure of the Indian and Philippine urea markets."- Pls.’ Cmts. 5-6.
Commerce defends its "single surrogate country" preference by explaining that "[u]sing
reliable data from the primary surrogate is preferred to using data from the secondary surrogate
because mixing in values f``rom a secondary surrogate country adds a distortion into the
calculations." Def``.’s Resp. 2-3; Def.’s Resp. 7 ("[U]nnecessary distortion [is] caused by mixing
in values from other countries when reliable primary surrogate data is available."). According to
Commerce, "there are sound and reasonable economic reasons for Commerce to select, to the
extent there is reliable data in the primary surrogate, all of the surrogate values from the primary
surrogate country, These economic reasons render information from secondary surrogate
countries not the best available inforrnation, and thus not appropriate for valuing the factors of
production." Def.’s Resp. 2.
Specifically, in selecting surrogate values,
Commerce is attempting to determine what an Indian producer would pay for the
factors of production. The Indian producer would pay prices available in India or
for imports into India. An Indian producer generally has access only to prices in
its own country (India) and would not have access to prices in secondary
surrogate countries, such as the Philippines. Therefore, resorting to secondary
surrogate country data to obtain a factor value actually undermines and makes less
accurate Commerce’s determination of what an Indian producer would pay for
factors used to produce the subject merchandise.
Court No. 08-00364 Page 1 1
Def``.’s Resp. 3. Therefore, "Commerce only resorts to secondary surrogate country values if the
record does not contain any value for a factor from the primary surrogate, or if the primary
surrogate country values upon the record are deterrnined, based on record evidence, to be
aberrational or unreliable." Def.’s Resp. 3-4.
Commerce further asserts that it is not required to compare "the primary surrogate
country value with a secondary surrogate country value to see which one is ‘better.’_" Def.’s
Resp. 4. ln other words, Commerce insists that it is not required to "search for the ‘best
available’ information across surrogate countries." Def.’s Resp. 5; see also Remand Results at
29 ("ln the instant review, where we have reliable surrogate value data from the primary
surrogate country, we determined that the use of reliable surrogate value information from the
primary surrogate country is the best available information when the altemative is information
obtained from a secondary surrogate country."); Def.-lnt.’s Resp. 2-3 ("The problem with
Plaintiffs’ argument is that all other things are not equal: one source is from the primary
surrogate country and one is not.").
With respect to plaintiffs’ claimed difference between the domestic sales prices from the
Philippines and the import prices f``rom India (and the related difference between the structures of
the Indian and Philippine domestic urea markets), Commerce counters that plaintiffs’ argument
is misleading because the Department found "no evidence that the Indian import value of urea is
distorted by virtue of any govemment involvement in the import, movement or resale of urea in
India." Remand Results at 30. According to Commerce, plaintiffs "ha[ve] pointed to no new
evidence that would lead us to reconsider the issue." Remand Results at 3 l; see also Def.-Int.’s
Resp. 4 ("With respect to the Indian govemment’s involvement in urea pricing within India-
that is not relevant to pricing at the border."). Put another way, Commerce argues that while the
Court No. 08-00364 Page 12
Ir1dian govemment may play a role in domestic urea pricing, and therefore the structure of the
domestic urea market in India may differ from that of the Philippines, there is no evidence on the
record that this role extends to import pricing.
In addressing plaintiffs’ reference to the "greater specificity of the Philippine data," the
Department counters that "any attempt to say that the Departrnent established that the 50-kg bags
are specific to purchases made in this review is misleading. The'fact is that, while the record
shows one respondent purchased urea in quantities similar to 50-kg bags, the record also shows
that the other respondent’s urea purchases were measured in [a] much larger unit of measure than
[kilograms]." Remand Results at 30.
As to plaintiffs’ argument that the Indian and Philippine urea markets are sufficiently
different as to require the use of the Philippine data, this claim also relates to plaintiffs’ assertion
that the Indian govemment is involved in the domestic urea market. In addressing this argument,
Commerce again points out that the value it used for urea was the import price, and that there is
no record evidence of government involvement in the import market for urea. Remand Results
at 30-3 l; see also Def.-Int.’s Resp. 4.
The court holds that Commerce’s decision to use the Indian data was supported by
substantial evidence. First, the preference for the use of a "single surrogate country" is directed
by regulation. 19 C.F.R. § 35l.408(c)(2) ("[Commerce] normally will value all factors in a
single surrogate country."). Thus, the court must treat seriously the Department’s preference for
the use of a single surrogate country. See, e.g., Royal T hai Gov ’t v. United States, 436 F.3d
1330, 1340 (Fed. Cir. 2006) (deferring to Commerce’s interpretation of its own regulation);
Cathedral Candle Co. v. United States ITC, 400 F.3d 1352, 1363 (Fed. Cir. 2005) ("[l]t is well
Court No. 08-003 64 Page 13
settled that an agency’s interpretation of its own regulations is entitled to broad deference from
the courts.").
Second, the preference is also reasonable because, as Commerce points out, deriving the
surrogate data from one surrogate country lirnits the amount of distortion introduced into its
calculations because a domestic producer would be more likely to purchase a product available
in India. As the court pointed out in Peer Bearing, "the preference for use of data from a single
surrogate country could support a choice of data as the best available information where the
other available data ‘upon a fair comparison, are otherwise seen to be fairly equal."’ Peer
Bearing Co.-Changshan v. United States, 35 CIT _, _, 804 F. Supp. 2d l337, 1353 (201l)
(citation omitted); see also Fuwei Films (Shandong) Co. v. United States, 36 CIT _, __, 837 F.
Supp. 2d 1347, 1356 (2012) ("Commerce’s preference for using data from a single country [is]
unreasonable when the data was demonstrably aberrational as compared to certain benchmark
prices, and alternative data sources could be better corroborated.") (citation omitted); Bristol
Metals L.P. v. United States, 34 CIT _, _, 703 F. Supp. 2d 1370, 1374 (2010) ("Commerce’s
regulations provide that surrogate values should normally be ‘ publicly available’ and . . . from a
single surrogate countr'y.” (citing 19 C.F.R. § 35l.408(c)). Thus, the use of a "single surrogate
country" is justified when, as here, all other factors are "fairly equal" because minimizing
distortion supports a finding that Commerce relied upon the best available information on the
record.
Third, plaintiffs’ reliance on Dorbest does not help their argument. In Dorbest, this
Court stated that when "Commerce is faced with a choice between two imperfect options, it is
within Commerce’s discretion to determine which choice represents the best available
information," so long as the Department provides a reasonable explanation Dorbest, 30 CIT at
Court No. 08-00364 Page 14
l687, 462 F. Supp. 2d at 1277; see also T rust Chem Co. v. United States, 35 CIT _, _, 791 F.
Supp. 2d 1257, 1263 (201 l). As defendant indicates, "[n]owhere in [Dorbest] . . . did the Court
require Commerce to compare values between surrogate countries when there is a reliable value
from the primary surrogate country. Indeed, [in Dorbest] the Court specifically upheld
Commerce’s decision not to use three lndonesian financial statements because there were
adequate financial statements from the primary surrogate country, India, on the record.” Def.’s
Resp. 5 (citing Dorbest, 462 F. Supp. 2d at 1307-08).
With respect to plaintiffs’ argument that a determination based on the "best available
inforrriation" requires that Commerce make a more complete comparison of the datasets, it is
clear that here, the Departrnent, after establishing that the information from each country was
reliable and not aberrational, went on to address the three specific areas for comparison urged by
plaintiffs. As such, Commerce did not merely rely on its preference for using data from a single
surrogate country in reaching its deterrnination, but performed the comparison that plaintiffs
insist is required by the "best available information" standard and by the court’s remand
instructions,
As to the Hrst difference that plaintiffs claim would have emerged from a proper
comparison, the court is not convinced. The plaintiffs have not adequately supported their
argument that, because the Philippine dataset reflects domestic sales rather than import
transactions, it should be preferred over the Indian data. As defendant points out, "[w]hile the
Indian govemment may control the domestic market for urea, there is no evidence that the Indian
govemment has any control over the price at which other market-economy countries sell urea to
India." Def.’s Resp. 7-8. In fact, the record is silent as to the question of whether or not the
Indian government had any control over the prices at which third country market economy
Court No. 08-00364 Page 15
countries sold urea into the Indian market. Therefore, this claimed difference carmot be said to
undermine the reliability of the Indian data because there is no record evidence that import prices
of urea are not market-driven. In addition, plaintiffs have cited no evidence that a domestic
Indian producer would prefer domestic rather than imported urea.
Plaintiffs also argue for the greater specificity of the Philippine data because it was for
urea sold in fifty-kilogram bags. Pls.’ Cmts. 4-5 ("Another potentially significant difference
between the Philippine and Indian urea price data is the greater specificity of the Philippine data.
The Philippine data is specific to urea sold in SO-kilogram bags."). This argument, however,
results from a clear misreading of the Remand Results. While Commerce did identify one
respondent that purchased urea in quantities similar to fifty-kilogram 'bags, "the other
respondent’s urea purchases were measured in [a] much larger unit of measure than
[kilograms]." Remand Results at 30. Therefore, plaintiffs’ "greater specificity" argument
carmot be credited because the Philippine data is not necessarily more specific to the production
of the isos at issue here.
Finally, plaintiffs point to the different market structures of India and the Philippines as
an important difference between the two datasets. Pls.’ Cmts. 5-6 (“[Another] potentially
relevant consideration, had the Departrnent conducted the required comparison of the data sets,
involves the very different structure of the Iridian and Philippine urea markets. The record
establishes that only three State Trading Enterprises are authorized by the Indian govemment to
import urea, and such imports are based on the Govemment of India’s assessment of the
‘requirements of urea imports’ for the country.[g] . . . Conversely, there is no record evidence of
8 In support of this argument, plaintiffs point to a print-out of the Indian
Department of Fertilizer’s Website, which plaintiffs submitted to Commerce during the
underlying review as part of their rebuttal comments on the surrogate values for the factors of
Court No. 08-00364 Page 16
any govemmental involvement whatsoever in the Philippine urea market."). This issue overlaps
with plaintiffs’ argument, discussed above, that the Indian dataset reflects import prices, while
the Philippine dataset reflects domestic market prices. See Pls.’ Cmts. 5-6. As noted above,
however, this perceived difference between the market structures of India and the Philippines
does not undermine the results of Commerce’s comparison. While it is, in fact, the case that
three domestic Indian companies are authorized to contract_for all of the country’s urea imports
based on the government’s assessment of need, there is no indication that the price of the urea is
set by other than market forces. Indeed, Commerce examined the record and found "no evidence
that the Indian import value of urea is distorted by virtue of any govemment involvement in the
import, movement or resale of urea [with]in India." Remand Results at 30; see also Def.-Int.’s
Resp. 4 ("With respect to the Indian govemment’s involvement in urea pricing within India-
that is not relevant to pricing at the border."). Plaintiffs have produced no evidence that would
undermine this conclusion. That is, although plaintiffs find the govemment of India’s
involvement in the volume of urea imports significant, they placed no evidence on the record
demonstrating that this involvement distorted the price of imports into India. The conclusion
that the urea surrogate value was not distorted by govemment involvement is further bolstered by
this court’s consideration of the facts inArch Chemicals. Arch Chems., Inc. v. United States, 33
CIT _, _, Slip Op. 09-00071, at 30 (July 13, 2009) (not reported in the Federal Suppleinent)
production. According to the Department of Fertilizer’s Website, "[t]he requirement of urea
imports is assessed by [the Govemment of India] in relation to the estimated demand, indigenous
production, availability of stocks and pipeline requiremen ." App. in Supp. of Pls.’ Cmts. Tab l,
Ex. 12, at 1 (May 3, 2012) (ECF. Dkt. No. 91) (Pls.’ App."). Then, based on the Indian
Government’s estimate of necessary imports, the Departrnent of Fertilizer authorizes three
agencies to arrange for imports of urea: (l) MMTC Ltd., (2) Indian Potash Lirriited, and (3) the
State Trading Corporation. Pls.’ App. Tab 1, Ex. 12, at l. In doing so, "[l]ong term contracting
with producers is permitted with a view to ensure security of supplies at the intemationally
competitive prices most advantageous to the country." Pls.’ App. Tab l, Ex. 12, at 2.
Court No. 08-003 64 Page 17
(finding that there was no evidence that data was "tainted by reason of government
involvement").
Thus, Commerce properly relied on the preference for single country data found in its
regulation when finding a surrogate value for urea. In addition, the court -fmds that Commerce
properly followed the court’s remand instructions by evaluating the Philippine dataset and
comparing it to the Indian dataset before concluding that the Iridian data remained the best
available information on the record. Because Commerce actually performed this analysis, the
court reaches no conclusion as to whether the comparison is required by the statute. Therefore,
based on the foregoing, the court sustains the Department’s use of the Indian WTA data to value
the urea input.
C. Omani Data Included in the Urea Price Data from India
The court also directed Commerce to "revisit its determination with respect to the Omani
prices [that were included in the Indian WTA data used to value the urea input], fully analyze the
evidence regarding the Omani data, and fully explain and support with substantial evidence its
determination of whether or not to include the Omani data in the WTA data." Clearon II, 35 CIT
at _, Slip Op. 11-142, at 3 l. The purpose of this direction was to address plaintiffs’ complaint
that the Omani prices were aberrationally low, making the WTA data as a whole aberrationally
loW. Pls.’ Cmts. 7 ("[T]he Omani imports were the lowest-valued imports of any country into
India, and the next-lowest source of imports (from Liberia) was 46% higher than the Omani
value.").
In response, Commerce "reexamined the information on the record . . . and determined
that the Omani data was properly included in the Indian WTA data in calculating a surrogate
value for urea." Remand Results at ll. The Department asserts that, in accordance with its
Court No. 08-00364 Page 18
practice, it first "compared the aggregate Indian import [average unit value] of urea ($0.23 per
kg) with [the prices for urea from] other potential surrogate countries (Indonesia ($0. 14 per kg),
Sri Larika ($0.29 per kg), and the Philippines ($0.22 per kg)) and found that the Indian import
value is within the range of values for those countries." Remand Results at 12. Thus, the Indian
value, which included prices of urea imported into India from other countries including from
Oman, was lower than the values for some potential surrogate countries, but higher than the
values from others. For this reason, the Department did not find the lridian value to be
aberrational.
Going beyond its usual practice, Commerce then "applied an additional test comparing
the value of Indian imports from Oman with other record inforrnation, whereby it found that the
[average unit value] for Indian imports of urea from Oman ($0.18 per kg) are higher than the
lndonesian import [average unit value] ($0. 14 per kg) and the [average unit value] for several
countries in the Philippine import data ($0. 13 per kg to $0.16 per kg)." Remand Results at 12;
Remand Results at 14-15 ("[T]he Department took the additional steps to compare the Indian
import value of urea from Oman to the [average unit value] for several countries in the
Philippine and lndonesian import data and found that the Omani value is, in fact, higher than the
import values of urea for other potential surrogate countries. Accordingly, as a result of this
additional test, the Departrnent found based on record evidence that the Omani urea price fell
within the range of urea prices from other potential surrogate countries, and that this was
additional support for finding that there was no record evidence that the Indian import value of
urea from Oman is distorted or aberrational."); see also Def``.’s Resp. 9 ("[T]he Omani data fell
within the range of the import values from individual market economy countries into the other
potential surrogate countries.").
Court No. 08-00364 Page 19
Next, the Departrnent looked at the range of values for urea imported into India and
found that while
the Omani price is the lowest unit value among Indian imports, we do not find the
Omani value to be outside the range of unit values. As with any range of data,
there is by necessity a low end and a high end of the range. While the Omani
value is 30 percent lower than the average, the value of Gerinan imports of urea
into India is approximately 50 percent higher than the average. Accordingly, we
do not find the Omarii import value, as a low end of the range, or the German
import value, as the high end of the range, to be an outlier. . . . ln other words,
because the low value (Oman) and the hig``h value (Germany) are both somewhat
removed from the average, we don’t find either to be an anomaly, but merely the
low and high ends of a broad spectrum of values of Indian imports of urea.
Remand Results at 15. For these reasons, Commerce stated that it "continues to find that the
Omani price is not distorted or aberrational because it is within a range of values of Indian
irnports, albeit at the low end of the range, and is within the range of import prices of urea of
other potential surrogate countries." Remand Results at 15.
Plaintiffs renew their objection to the inclusion of the Omani values within the Indian
WTA dataset because Commerce "has not explained the basis for its fmding that the Omani and
German imports represent the ‘low and high ends of a broad spectrum of values."’g Pls.’ Cmts.
9 Defendant also points to the court’s finding in Clearon ll that "there does not
appear to be any evidence on the record that demonstrates how lndia’s long-term contract with
Oman tainted the sale prices of urea." Clearon II, 35 CIT at _, Slip Op. 11-142 at 19. Here,
this continues to be true because there is no evidence on the record that suggests price distortions
resulting from the long-term contract.
Sirnilarly, in Arch Chemicals, a case involving the prior first administrative review of the
antidumping duty order on isos from the PRC, the court rejected "the same argument with
respect to the Govemment of India’s control of the urea imports and market in India in an
attempt to exclude Indian imports of urea from Oman." Remand Results at 10-1 1. ln doing so,
the court stated that it was
unconvinced that Commerce erred by not excluding the [Omani] data as tainted
by reason of government involvement. Oman and India are market economy
countries and there is no evidence that, at the time the contract was entered into,
the prices set were not market-driven. In addition, Commerce could reasonably
Court No. 08-00364 Page 20
7. "To the contrary, the data appear more consistent with a range of imports within a relatively
narrow band, with Oman and Gerrnany as the clear outlier data points." Pls.’ Cmts. 7-8.
The court finds that Commerce has supported with substantial evidence its decision to
include the Omani data in the Indian WTA dataset when determining the surrogate value for
urea. As an initial matter, it is worth noting that had Commerce relied solely on its argument that
the low Omani value and the high Gerrnan value demonstrated that the Omani value fell within
an acceptable range, this issue would have been remanded. The Department’s argument that
these two values somehow validate each other is neither adequately explained nor convincingly
self-evident. The Departrnent, however, did not rely on this analysis alone.
First, Commerce compared the aggregate Indian import average unit value of urea to
other potential surrogate datasets on the record (i.e., prices for urea imported into countries other
than India), which demonstrated that it was not aberrational because it was higher than some
potential surrogate datasets, but lower than others. Second, Commerce examined the Omani
value on its own by comparing it to prices of other potential surrogate values on the record. In
doing so, the Department showed that the Omani value was not aberrational, even though it was
the lowest value within the Indian import dataset, because it was higher than other potential
surrogate values, including the lndonesian import average unit value and the average unit value
for several countries in the Philippine import data. Thus, it is apparent that the Indian import
find that, the mere fact that a product is sold to a single purchaser pursuant to a
long-tenn contract, does not necessarily make the price anomalous. Further, there
was no record evidence demonstrating that urea sales made subject to the contract
were distorted.
Arch Chems., 35 CIT at _ Slip Op. 09-00071, at 29-30. Defendant claims that "[w]hile the
facts in Arch Chemicals and the instant administrative review may be different with respect to
the Indian import data of urea from Oman, we find in this redetermination that this record also
does not contain any information to indicate that the Oman value is distorted or aberrational."
Remand Results at 13.
Court No. 08-00364 Page 21
dataset as a whole fell within the range of urea prices from other potential surrogate countries.
Furthe``rmore, while the Omani data itself was at the low end of the range of all potential
surrogate values on this record, it was not the lowest value, nor was it the lowest when compared
to some countries within the Philippine import dataset,
Additionally, defendant is correct in noting that the Omani data was averaged with other
Indian import data, serving to mitigate any distortion that the low figure may have introduced.
Def.’s Resp. 6 ("[T]he lndian WTA data for urea represent broad-market average non-export
prices, because the average value of the urea is based upon import prices compiled from a broad
range of market-economy countries."). Thus, despite plaintiffs’ argument, it appears that the
Departrnent’s conclusion that the Omani data was not aberrational was supported by substantial
evidence.
III. Commerce’s Choice of a Surrogate Value for Steam C0al
In its Final Results, Commerce valued the steam coal input using prices from the TERI
Data Directory and Yearbook, which reports steam coal prices from the Indian market. Remand
Results at 18§ In Clearon II, the court directed Commerce to "revisit its detemiination with
respect to its surrogate valuation of steam coal, and fully analyze the use of the TERI data,
including whether the chemical industry would be considered a core sector industry, and whether
the use of this data is supported by substantial evidence." Clearon II, 35 CIT at _J Slip Op. 1 1-
142 at 31. Whether India’s chemical industry is a core sector industry might have a bearing on
whether a manufacturer of isos could purchase steam coal at the price contained in the TERI
data.
In response, Commerce "reopened the record . . . and requested that interested parties
submit new information pertaining to the valuation of steam coal." Remand Results at 19.
Court No. 08-00364 Page 22
Specifically, Commerce sought "information on whether the chemical industry is a part of the
core sector industry and, thus, received TERI prices which are lower than prices offered by [Coal
India] to non-core industries." Remand Results at 19.
The Departrnent received new information from plaintiffs and Jiheng, including Coal
lndia’s list of core sector customers. Following examination of this inforrnation, Commerce
"continue[d] to find that TERI prices are the best available information for valuing Jiheng’s
steam coal." Remand Results at 20. In particular, Commerce found that "[w]hile the record
does not list the chemical industry as a ‘core industry’ per se, evidence collected after reopening
the record indicates that numerous chemical companies are listed by [Coal India] as part of the
core sector." Remand Results at 20.
Plaintiffs contend that the Department "ignores directly relevant evidence showing that
chemicals is not among the core industry customers of Coal India . . . and that the [Department’s]
findings are manifestly not supported by substantial evidence." Pls.’ Cmts. 8. Specifically,
plaintiffs challenge the Department’s reading of the Coal India List because "the vast majority of
chemical companies listed in the [Coal Ir1dia] customer list are identified as non-core sector
customers, not core sector customers." Pls.’ Cmts. 9. Under plaintiffs’ reading of the list, "the
chemical companies listed as ‘core sector’ customers . . . are so identified because they have
Captive Power Plants; those companies that simply produce chemicals and do not undertake
other ‘core sector’ operations are all listed as ‘non-core’ customers." Pls.’ Cmts. 9-10; see also
Pls.’ Cmts. ll ("[T]he only chemical companies that are listed as Core Sector customers are so
listed n_ot because of their chemical producing operations--which should be the focus of the
Department’s inquiry_but because they qualify based on other, unrelated operations such as
running a Captive Power Plant.").
Court No. 08-00364 Page 23
Responding to these assertions, Commerce states that while plaintiffs "claim that all five
companies with the word ‘chemical’ in them are being listed as core sector customers only
because they have captive power plants, . . . [a] careful examination of the same information
reveals that chemical companies which do not maintain captive power plants are also classified
as core sector customers." Remand Results at 34; see also Remand Results at 21 (The list on the
record "refers to additional chemical companies as core customers without referring to them as
captive power producers."). In particular, Commerce identified "Tr Chemicals Pvt., Ltd." as a
chemical company without a captive power plant that was listed as a core sector customer.
Remand Results at 34. In addition, Coal India’s list of core sector customers included Kanoria
Chemical lndustries, Ltd., which produces chemicals and fertilizers. Remand Results at 20. To
Commerce, "Kanoria’s experience as a core consumer of steam coal supports the fmding that
producers of chlorinated isocyanurates and fertilizers [and other chemicals] are, de facto, treated
as core industries in India." Remand Results at 20. For this reason, the Departnient insists that
"while the definition of the core sector industries is unclear, chemical companies enjoy the
access to TERI prices." Remand Results at 34.
Finally, plaintiffs argue that the Department "fail[ed] to discuss-or even acknowledge
the record evidence directly contradicting the Department’s findings with respect to steam coal
valuation," including three specific items: (l) the 2006-2007 Ministry of Coal annual report, (2)
the Indian Supreme Court decision, and (3) the annual repoits. Pls.’ Cmts. 11-12.
As to this last argument, the Departrnent maintains that it addressed the evidence placed
on the record by plaintiffs and discussed each item of evidence in the Rernand Results. See
Remand Results 34-37. In particular, Commerce notes that it reviewed the statement from the
Indian Minister of Coal "regarding the price at which coal was supplied to small scale industries
Court No. 08-00364 Page 24
during the POR," and then concluded that "[w]hile the statement explains that ‘Small Scale
Industry units come in the non-core sector category,’ no party has argued that the chemical
industry is a small scale industry, nor is there any record evidence to that effect. Accordingly,
we fmd this particular document to be of no consequence regarding the_ prices at which coal
would have been supplied to chemical industry customers during the POR." Remand Results at
36. Tlius, for Commerce, whether small-scale industries have access to inexpensive coal is
irrelevant because there is no evidence that the Indian chemical industry is a small-scale
industry,
As to the Supreme Court of India decision, the Department emphasized that the "Court
stated that ‘core sector consumers include the vital sections of national economy related to
infrastructure development as for example, power, steel, cement, defence, fertilizer, railway,
paper, alurninum, export, central public sector undertaking, etc."’ Remand Results at 35.
According to Commerce, "the use of ‘for example’ and ‘etc.’ suggests that the list is not all
inclusive, i.e., it is not necessarily a comprehensive list of all core sector industries." Remand
Results at 35. Moreover, the Departrnent insists that even though the decision’s "list does not
include the chemical industry, as explained elsewhere, other record evidence demonstrates that
chemical companies are eligible for the TERI prices," such as Tr Chemicals Pvt., Ltd. and
Kanoria Chemical lndustries, Ltd. Remand Results at 35.
The Department also addressed "the Indian Minerals Year Book 2008, an armual
govemment publication issued by the Indian Bureau of Mines" that was submitted by Jiheng.
Remand Results 21. ln that publication, the chemical, cement, and fertilizer industries are
characterized "as being dependent on coal for their process and energy requirements." Remand
Results at 21. As noted, the cement and fertilizer industries are indisputably core industries.
Court No. 08-00364 Page 25
Commerce points out that "[t]he publication lists the chemical industry together with other core
industries as coal dependent without discriminating between core and non-core sector industries"
and it "refers to dispatches of coal by industry priority" with the "chemical industry . . .
identified as a_ ‘priority’ industry on . . . par with the cement or steel industries.” Remand Results
at 21. Furthermore, the "publication discusses coal pricing over the relevant POR and never
mentions any distinction in pricing between core and non-core sectors." Remand Results at 21.
For these reasons, the Departrnent concluded that "[w]hile the publication does not define
industries in terms of core and non-core industries, the designation of the chemical industries as a
priority industry (along with the coincidence of the coal prices discussed in the yearbook being
similar to the TERI steam coal prices for core industries) supports a finding that the chemical
industry is a core industry." Remand Results at 21.
Finally, Commerce reiterated its view that the TERI dataset was the best available
information for valuing the steam coal input because the TERI dataset is specific to Jiheng’s
reported coal inputs. That is, the TERI dataset is for the type of coal actually used by Jiheng.
Here, Jiheng provided the Department with information on the useful heat value ("UHV")]° of
the steam coal it used. "Therefore, Jiheng’s steam coal inputs are easily categorized using
domestic Indian price data, which assigns prices for coal based on UHV." Remand Results at
22; see also Remand Results at 37 ("[T]he Departinent has selected the TERI Data for categories
B and C to value steam coal based on Jiheng’s reported UHV of between 5300-5900 kcal/kg as
provided by Jiheng."). ln contrast, "the WTA steam coal price data, which |``_plaintiffs] suggest
[Commerce] use, is listed under the heading ‘steam coal,’ without further specification of the
UHV." Remand Results at 22. Consequently, "because domestic Indian coal data provide the
'° Coal is classified according to its commercial usefulness as measured by its
Useful Heat Value ("UHV").
Court No. 08-00364 Page 26
most product-specific prices, we find that it offers the best available information for valuing
Jiheng’s steam coal inputs." Remand Results at 22; Def``.’s Resp. 1 1-12 ("The only heat-indexed
‘steam coal’ surrogate value on the record is the TERI data steam coal value. All other record
coal values do not identify the specific type of coal or the heat index of the c0al.").
The court finds that Commerce has supported with substantial evidence its determination
to value the steam coal input using the TERI data. First, it is clear that Commerce took into
consideration the three pieces of evidence plaintiffs placed on the record, and reasonably
concluded that they did not present substantial evidence sufficient to undermine Commerce’s
conclusion that chemical companies in India can qualify for core sector steam coal pricing. That
is, the Ministry of Coal armual report, the Indian Supreme Court decision, and the armual report,
whether considered separately or in combination, are simply not convincing evidence that the
core sector pricing in the TERI data was not available to Jiheng.
The court also finds that it was reasonable for Commerce to conclude that some chemical
companies are considered "core sector" industries and can thus benefit nom the TERI prices for
steam coal, While plaintiffs claim that the "vast majority of chemical companies listed in the
[Coal India] customer list are identified as non-core sector customers, not core sector
customers,” the record evidence does not clearly show that the chemical industry is categorized
as a core or a non-core sector, and the Departrnent was able to point to at least one chemical
company listed as a core sector industry that was not also listed for some other core activity, such
as having a captive power plant. Pls.’ Cmts. 9; see Def``.-Int.’s Resp. 5 ("Commerce pointed to
the substantial evidence that India’s chemical industry, including those manufacturing product
comparable to the subject chlorinated isocyanurates, did, in fact, qualify to receive coal at core
prices during the period of review.").
Court No. 08-00364 Page 27
Furtherrnore, Commerce specifically found "that the TERI data are the best available
information with which to value steam coal because they are specific to Jiheng’s reported coal
inputs, they comport with the core industry pricing, they are complete, and they are
contemporaneous with the POR." Remand Results at 22-23. lt appears, then, that Commerce
has properly examined, explained, and supported its findings with substantial evidence as to the
surrogate valuation of the steam coal. Huaiyin Foreign Trade Corp. V. United States, 322 F.3d
1369, 1374 (Fed. Cir. 2003) ("Substantial evidence is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion." (citation omitted)). Therefore, the court
finds that here, as has been found in the past, the use of the TERI data is supported by substantial
evidence. See, e.g., Arch Chems., 33 CIT at _, Slip Op. 09-00071, at 41 (holding that
"Commerce acted reasonably in using the TERI data to value steam coal" because the TERI
dataset was the most "product specific" surrogate available); Hebei Metals & Minerals Imp. &
Exp. Corp. v. United States, 29 CIT 1204, Slip Op. No. 05-00126 (2005) (sustaining
Commerce’s use of TERI data as a surrogate value for coal). Thus, the Department’s
determination with respect to the surrogate value for steam coal is sustained.
IV. Commerce’s Valuati0n of the Ammonia Gas By-Product Credit
In the Final Results, the Departrnent granted Jiheng a by-product offset for ammonia gas,
which the Departrnent valued using Indian import data for anhydrous ammonia" nom the WTA.
Because the Departrnent believed it had not adequately explained why the value for anhydrous
11 According to defendant-intervenor, "there are only two forms of ammonia gas-
anhydrous and hydrous (as opposed to ammonia compounds that are not at issue here). The
terms ‘anhydrous’ and ‘hydrous’ refer to whether or not the ammonia gas molecules are
combined with water. Specifically ‘anhydrous’ means ‘Being without water, especially water of
hydration."’ Def.-Int.’s Resp. 6 (quoting McGRAw-H!LL DICTIoNARY 0F Sc1ENTIF1c &
TECHNICAL TERMS 103 (6th ed. 2003)).
Court No. 08-003 64 Page 28
ammonia was appropriate for valuing the by-product offset credit, it requested a voluntary
remand to further explain its reasoning. Remand Results at 23. In Clearon II, the court granted
Commerce’s request and directed the Department to "explain its selection of anhydrous ammonia
to value the ammonia gas by-product offset." Clearon I_I, 35 CIT at _, Slip Op. ll-142 at 31.
On rernand, Commerce states that "the Department grants an offset to nomial value for
scrap generated during the production of subject merchandise if the respondent can demonstrate
that the scrap by-product is either resold, or has commercial value and reenters the respondent’s
production process." Remand Results at 23. Furthermore, "in valuing by-product offsets, . . .
the Departrnent uses surrogate values based on the best available record infonnation, as it does
for other [factors of production]." Remand Results at 23. Here, the Department has again
concluded that the WTA Indian import data for anhydrous ammonia is the best available
information for valuing the ammonia gas by-product. Remand Results at 24.
Plaintiffs argue that Commerce’s determination is flawed because Jiheng’s ammonia gas
by-product is not actually anhydrous an1rnonia. Thus, according to plaintiffs, the ammonia gas
was improperly valued. ln addition, plaintiffs believe that the Department should deny a by-
product offset altogether based on (1) its previously-stated argument that Jiheng does not
actually produce pure ammonia gas, but rather it produces a waste ammonia gas, and the
anhydrous ammonia used to value this waste gas has a minimum purity level of 99%; and (2)
because Jiheng does not possess the processing and packaging facilities that would be required to
convert its waste ammonia gas by-product into the type of pure ammonia gas that would be more
equivalent to the anhydrous ammonia used to value the waste ammonia gas by-product. Pls.’
Cmts. 13. At center, plaintiffs argue that "the fundamental error . . . is that the Departrnent is
Court No. 08-00364 Page 29
crediting the respondent for the value of a highly-processed, high value-added product that it
does not produce." Pls.’ Cmts. 13.
F or its part, the Department disagrees with plaintiffs’ "speculative argument that Jiheng
did not produce pure ammonia gas, Record evidence indicates that Jiheng indeed produced pure
ammonia gas that was used in the production of the downstream product of ammonium sulfate."
Remand Results at 38. Commerce further points out that "in valuing Jiheng’s ammonia gas by-
product, the Departrnent did not actually value the total quantity of ammonia gas that Jiheng
produced during production of the subject merchandise because Jiheng was unable to place a
measuring instrument to track the amount of pure ammonia gas produced or consumed."
Remand Results at 24. "Upon the Department’s request, however, Jiheng provided evidence that
lirnited the quantity of ammonia claimed as a by-product offset to the amount of 100-percent
pure ammonia gas_created from its production of subject merchandise-that was consumed in
producing the amount of ammonium sulfate [the downstream product] that was actually sold [by
Jiheng] during the POR." Remand Results at 24-25.
In other words, Jiheng informed the Departrnent of the actual quantity of pure ammonia
gas that was needed to produce the ammonium sulfate that it produced and sold during the POR.
Thus, "while the total weight of the ammonia gas that was generated during Jiheng’s production
may include non-ammonia by-products . . ~. , the quantity of ammonia gas that is being valued
[for purposes of the offset] is a pure chemical weight, and we are only granting Jiheng a by-
product offset for the pure ammonia content within the ammonium sulfate that it produces nom
its ammonia gas." Remand Results at 25; see also Remand Results at 38-39'("Jiheng also
provided information to demonstrate that the quantity of ammonia for which the Department
applied an offset was limited to the amount created from Jiheng’s reported [factors of
Court No. 08-00364 Page 30
production], and liinited further by the amount that was used to produce ammonium sulfate that
was actually sold during the POR.").
Second, "the record contains no evidence that Jiheng purchased ammonia gas in addition
to the ammonia gas that Jiheng produced that could have entered into its production of
ammonium sulfate." Remand Results at 38; see also Remand Results at 39 ("[T]here is no
evidence on the record to demonstrate that the ammonia gas used by Jiheng to produce
ammonium sulfate was not obtained nom the ammonia gas produced as a result of the
production of its subject merchandise."). Therefore, the Department concluded that the
ammonia gas required for its production of its downstream product, the ammonium sulfate, was
produced as a by-product of its production of isos, and then repurposed in the ammonium sulfate
production process.
Thus, the Department insists that substantial evidence supports its granting of a by-
product credit because: (l) it is undisputed that Jiheng produces ammonium sulfate; (2) pure
ammonia gas is required to make ammonium sulfate; (3) there is no evidence Jiheng purchased
pure ammonia gas, and, thus, the by-product is the only possible source; and (4) since Jiheng did
not sell any pure ammonia gas, the by-product credit was limited to the amount required to make
the ammonium sulfate Jiheng actually produced.
As to the valuation of the by-product credit, the Departrnent observed that plaintiffs did
not place on the record an altemative value for Jiheng’s by-product. Remand Results at 26
("[T]he WTA data for anhydrous ammonia is the only surrogate value information for ammonia
available on the record of this administrative review."). Furthermore, "the surrogate product,
i.e. , anhydrous ammonia is very similar to the 100-percent ammonia gas for which the
Departrnent is granting the by-product offset." Remand Results at 25
Court No. 08-00364 Page 31
Having revisited its determination to use anhydrous ammonia to value the ammonia gas
by-product offset, Commerce has reconsidered and fully explained its decision, lt is undisputed
that Jil1eng produces ammonium sulfate. lt is equally undisputed that Jiheng did not purchase the
pure ammonia gas required to produce the ammonium sulfate that Jiheng actually produced and
sold during the POR. Therefore, it was reasonable for Commerce to conclude that Jiheng reused
the waste ammonia gas from the production of isos as an input in the production of ammonium
sulfate, as there is no indication of any other potential source of the required ammonia gas,
Hence, Commerce’s conclusion that Jiheng was entitled to a by-product credit for its repurposing
of the waste ammonia gas in the ammonium sulfate’s manufacture was reasonable. lt was also
reasonable for Commerce to use the only value on the record to calculate the offset, and to apply
the offset to the amount of ammonia gas actually used to produce ammonium sulfate.
CONCLUSION
Based on the foregoing, it is hereby
ORDERED that the Departnient of Commerce’s Final Results of Redeterrnination are
SUSTAINED.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: February 20, 2013
New York, New York
UNITED STATES COURT OF INTERNATlONAL TRADE
CLEARON CORPORATION and
OCCIDENTAL CHEMICAL
CORPORATION,
Plaintiffs,
v.
Before: Richard K. Eaton, Judge
UNITED STATES,
Court No. 08-003 64
Defendant,
and
ARCH CHEMICALS, INC.,
Defendant-lntervenor.
.TUDGMENT
Upon consideration of the papers and proceedings had herein, and in conformity with the
court’s decision in this matter, it is hereby
ORDERED that the Remand Results are sustained. Accordingly, this case is dismissed.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: February 20, 2013
New York, New York