Jiangsu Senmao Bamboo and Wood Indus. Co. v. United States , 2023 CIT 126 ( 2023 )


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  •                                 Slip Op. 23-126
    UNITED STATES COURT OF INTERNATIONAL TRADE
    JIANGSU SENMAO BAMBOO
    AND WOOD INDUSTRY CO.,
    LTD.,
    Plaintiff,
    and
    LUMBER LIQUIDATORS
    SERVICES, LLC,
    Plaintiff-Intervenor,
    Before: Jennifer Choe-Groves, Judge
    v.
    Court No. 22-00190
    UNITED STATES,
    Defendant,
    and
    AMERICAN MANUFACTURERS
    OF MULTILAYERED WOOD
    FLOORING,
    Defendant-Intervenor.
    OPINION AND ORDER
    [Sustaining in part and remanding in part the U.S. Department of Commerce’s
    final results in the 2019–2020 antidumping duty administrative review of
    multilayered wood flooring from the People’s Republic of China.]
    Dated: August 25, 2023
    Court No. 22-00190                                                           Page 2
    Jeffrey S. Neeley and Stephen W. Brophy, Husch Blackwell LLP, of Washington,
    D.C., for Plaintiff Jiangsu Senmao Bamboo and Wood Industry Co., Ltd.
    Mark Ludwikowski and Kelsey Christensen, Clark Hill PLC, of Washington, D.C.,
    for Plaintiff-Intervenor Lumber Liquidators Services, LLC.
    Tara K. Hogan, Assistant Director, and Kelly M. Geddes, Trial Attorney,
    Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of
    Washington, D.C., for Defendant United States. With them on the brief were
    Brian M. Boynton, Principal Deputy Assistant Attorney General, and Patricia M.
    McCarthy, Director. Of counsel on the brief was Christopher Kimura, Attorney,
    Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
    Department of Commerce, of Washington, D.C.
    Timothy C. Brighthill and Stephanie M. Bell, Wiley Rein, LLP, of Washington,
    D.C., for Defendant-Intervenor American Manufacturers of Multilayered Wood
    Flooring.
    Choe-Groves, Judge: Plaintiff Jiangsu Senmao Bamboo and Wood Industry
    Co., Ltd. (“Plaintiff” or “Senmao”) filed this action pursuant to 
    19 U.S.C. § 1675
    contesting the final results of the U.S. Department of Commerce (“Commerce”) in
    Multilayered Wood Flooring from the People’s Republic of China (“Final
    Results”), 
    87 Fed. Reg. 39,464
     (Dep’t of Commerce July 1, 2022) (final results of
    antidumping duty admin. review; 2019–2020) and accompanying Issues and
    Decision Memorandum for the Final Results of Antidumping Duty Administrative
    Review: Multilayered Wood Flooring from the People’s Republic of China; 2019–
    Court No. 22-00190                                                             Page 3
    2020 (Dep’t of Commerce June 24, 2022) (“Final IDM”), PR 245.1
    Before the Court is Plaintiff’s Motion for Judgment upon the Agency Record
    Pursuant to USCIT Rule 56.2. Pl.’s R. 56 Mot. J. Agency R. Pursuant to USCIT
    R. 56.2 (“Plaintiff’s Motion” or “Pl.’s Mot.”), ECF No. 38; see also Mem. Supp.
    Pl.’s R. 56.2 Mot. J. Agency R. (“Pl.’s Br.”), ECF No. 38-1. Also before the Court
    is Plaintiff-Intervenor Lumber Liquidators Services, LLC’s (“Plaintiff-Intervenor”
    or “Lumber Liquidators”) Rule 56.2 Motion for Judgment on the Agency Record.
    Pl.-Interv.’s R. 56 Mot. J. Agency R. (“Plaintiff-Intervenor’s Motion” or “Pl.-
    Interv.’s Mot.”), ECF No. 39; see also Pl.-Interv.’s Mem. Law Supp. Pl.-Interv.’s
    R. 56.2 Mot. J. Agency R. (“Pl.-Interv.’s Br.”), ECF No. 39. Defendant United
    States (“Defendant”) filed Defendant’s Response in Opposition to Plaintiff’s and
    Plaintiff-Intervenor’s Motions for Judgment upon the Agency Record. Def.’s
    Resp. Opp’n Pl.’s Pl.-Interv.’s Mots. J. Agency R. (“Def.’s Resp.”), ECF No. 41.
    Defendant-Intervenor American Manufacturers of Multilayered Wood Flooring
    (“Defendant-Intervenor” or “AMMWF”) filed Defendant-Intervenor’s Response to
    Motion for Judgment on the Agency Record. Def.-Interv.’s Resp. Mot. J. Agency
    R. (“Def.-Interv.’s Resp.”), ECF Nos. 42, 43. Plaintiff filed Reply Brief of
    Plaintiff Jiangsu Senmao Bamboo and Wood Industry Co., Ltd. Pl.’s Reply Br.
    1
    Citations to the administrative record reflect the public administrative record
    (“PR”) document numbers. ECF Nos. 47, 48.
    Court No. 22-00190                                                            Page 4
    (“Pl.’s Reply”), ECF Nos. 44, 45. Plaintiff-Intervenor filed Reply Brief in Support
    of Rule 56.2 Motion for Judgment on the Agency Record by Plaintiff-Intervenor.
    Pl.-Interv.’s Reply Br. Supp. R. 56.2 Mot. J. Agency. R. (“Pl.-Interv.’s Reply”),
    ECF No. 46. The Court held oral argument on May 31, 2023. Oral Argument
    (May 31, 2023), ECF No. 52.
    For the following reasons, the Court sustains in part and remands in part the
    Final Results.
    ISSUES PRESENTED
    The Court reviews the following issues:
    1. Whether Commerce’s determination to select Brazil as the primary
    surrogate country, while using Malaysian data for log inputs, is supported
    by substantial evidence and in accordance with law;
    2. Whether Plaintiff-Intervenor’s argument that Malaysian data are
    aberrational is waived;
    3. Whether Commerce’s determination to revise the Brazilian surrogate
    value data for plywood is supported by substantial evidence and in
    accordance with law;
    4. Whether Commerce’s calculation of the Brazilian financial ratios is
    supported by substantial evidence and in accordance with law; and
    Court No. 22-00190                                                           Page 5
    5. Whether Commerce’s denial of Plaintiff’s by-product offset is in
    accordance with law.
    BACKGROUND
    Commerce conducted an administrative review for the period from
    December 1, 2019 through November 30, 2020. Initiation of Antidumping and
    Countervailing Duty Admin. Review, Multilayered Wood Flooring from the
    People’s Republic of China, 
    86 Fed. Reg. 8166
    , 8169–71 (Dep’t of Commerce
    Feb. 4, 2021). Commerce selected Senmao as the mandatory respondent in the
    investigation. See Commerce’s Antidumping Administrative Review of
    Multilayered Wood Flooring from the People’s Republic of China; 2019–2020:
    Respondent Selection Mem. (“Resp. Selection Mem.”) (Mar. 9, 2021), PR 112.
    Prior to Commerce issuing the preliminary results, Senmao proposed that
    Commerce should use Brazilian surrogate value data to value its factors of
    production and Defendant-Intervenor proposed that Commerce should use
    Malaysian surrogate values. Senmao’s Surrogate Value Cmts. (July 29, 2021),2 PR
    176–77; AMMWF’s Surrogate Value Cmts. (July 29, 2021), PR 179–82.
    On December 27, 2021, Commerce published its preliminary determination.
    Multilayered Wood Flooring from the People’s Republic of China (“Preliminary
    2
    Senmao’s Surrogate Value Comments are incorrectly dated as July 29, 2020.
    Senmao’s Surrogate Value Cmts. at 1.
    Court No. 22-00190                                                           Page 6
    Results”), 
    86 Fed. Reg. 73,252
     (Dep’t of Commerce Dec. 27, 2021) (prelim. results
    of the antidumping duty admin. review, prelim. determination of no shipments, and
    rescission of review, in part; 2019–2020), and accompanying Decision
    Memorandum for the Preliminary Results of Antidumping Administrative Review
    (Dec. 17, 2022) (“Preliminary Determination Memo” or “PDM”), PR 213. In the
    Preliminary Determination Memo, Commerce selected Brazil as the primary
    surrogate country, valued Senmao’s logs with surrogate values from the secondary
    surrogate country of Malaysia, determined that the financial data of Duratex were
    appropriate to calculate Senmao’s financing costs of the subject merchandise, and
    denied an offset to the reported factors of production for Senmao’s by-product.
    PDM at 17, 24–25. Commerce calculated an antidumping margin of zero for
    Senmao. 
    Id. at 14
    .
    Following the Preliminary Results, the parties to the investigation submitted
    additional briefing. Senmao’s Admin. Case Br. (Feb. 7, 2022), PR 228; Lumber
    Liquidators’ Letter in Lieu of Admin. Case Br. (Feb. 7, 2022), PR 229; AMMWF’s
    Admin. Case Br. (Feb. 7, 2022), PR 230; Senmao’s Admin. Rebuttal Br. (Feb. 17,
    2022), PR 233; Lumber Liquidators’ Admin. Rebuttal Br. (Feb. 17, 2022), PR 234;
    AMMWF’s Admin. Rebuttal Br. (Feb. 17, 2022), PR 235.
    Commerce published its Final Results on July 1, 2022. Final Results, 
    87 Fed. Reg. 39,464
    ; see also Final IDM. In the Final IDM, Commerce continued to
    Court No. 22-00190                                                            Page 7
    select Brazil as the primary surrogate country, value Senmao’s logs with
    Malaysian surrogate values, and deny Senmao a by-product offset, but Commerce
    revised the surrogate values for plywood and revised its calculation of surrogate
    financial ratios. See Final IDM at 5, 9–10, 22–23, 26–28. Commerce calculated
    Senmao’s antidumping duty margin at 39.27%. Final Results, 87 Fed. Reg. at
    39,465.
    Plaintiff filed this action timely pursuant to 
    19 U.S.C. § 1675
     contesting
    Commerce’s Final Results. See Compl., ECF No. 7.
    JURISDICTION
    The Court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff
    Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i), and 
    28 U.S.C. § 1581
    (c).
    The Court will hold unlawful any determination found to be unsupported by
    substantial evidence on the record or otherwise not in accordance with law. 19
    U.S.C. § 1516a(b)(1)(B)(i).
    DISCUSSION
    I.     Legal Framework
    Antidumping duties are calculated as the difference between the normal
    value of subject merchandise and the export price or the constructed export price of
    the subject merchandise. 
    19 U.S.C. § 1673
    . To determine the normal value of the
    subject merchandise in a non-market economy, Commerce must calculate
    Court No. 22-00190                                                             Page 8
    surrogate values using “the best available information regarding the values of such
    factors in a [comparable] market economy.” 19 U.S.C. § 1677b(c). In doing so,
    Commerce relies on one or more market economy countries that are (1) “at a level
    of economic development comparable to that of the non[-]market economy
    country,” and (2) “significant producers of comparable merchandise.” Id.
    § 1677b(c)(4). Commerce’s task is to “attempt to construct a hypothetical market
    value” of the subject merchandise in the non-market economy. Nation Ford Chem.
    Co. v. United States, 
    166 F.3d 1373
    , 1375 (Fed. Cir. 1999). When Commerce
    determines that there is more than one country at the same level of economic
    development as the non-market economy country and is a significant producer of
    comparable merchandise, Commerce will consider the quality and availability of
    the surrogate value data. See Fujian Lianfu Forestry Co. v. United States, 
    33 CIT 1056
    , 1075, 
    638 F. Supp. 2d 1325
    , 1347 (2009).
    Commerce’s regulatory preference is to value all factors of production with
    surrogate values from a single surrogate country. 
    19 C.F.R. § 351.408
    (c)(2);
    see Jiaxing Brother Fastener Co., Ltd. v. United States, 
    822 F.3d 1289
    , 1302 (Fed.
    Cir. 2016). However, Commerce may use a second surrogate country if data from
    the primary surrogate country are unavailable or unreliable. See Import Admin.
    Policy Bull. No. 04.1: Non-Market Economy Surrogate Country Selection Process
    (Dep’t of Commerce Mar. 1, 2004) (“Policy Bulletin No. 04.1”). When the data
    Court No. 22-00190                                                              Page 9
    from a single surrogate country are “demonstrably aberrational as compared to
    certain benchmark prices, and alternative data sources could be better
    corroborated,” Commerce’s preference for using data from a single country is
    deemed unreasonable. Peer Bearing Co.-Changshan v. United States, 
    35 CIT 103
    ,
    119, 
    752 F. Supp. 2d 1353
    , 1369–72 (2011).
    II.    Selection of Surrogate Country
    Plaintiff and Plaintiff-Intervenor argue that Commerce’s determination to
    select Brazil as the primary surrogate country, while also rejecting or adjusting
    Brazilian data for the primary inputs (valuing Plaintiff’s log inputs using
    Malaysian data, adjusting Brazilian plywood data, and revising the Brazilian
    financial ratios) is not in accordance with law or supported by substantial evidence.
    Pl.’s Br. at 16–19; Pl.-Interv.’s Br. at 17–20. Plaintiff-Intervenor asserts that
    Commerce’s use of Malaysian log data is not in accordance with law because
    Commerce deviated from its established methodology and caused an aberrational
    result. Pl.-Interv.’s Br. at 20–25. Plaintiff and Plaintiff-Intervenor contend that
    Commerce erred by not valuing all factors of production from a single surrogate
    country because the record in this case does not support a determination that
    Brazilian data are unavailable or unreliable. See Pl.’s Br. at 16–20; Pl.-Interv.’s
    Br. at 19–20. Plaintiff-Intervenor challenges Commerce’s determination to use
    Court No. 22-00190                                                             Page 10
    both Brazilian and Malaysian data as a departure from Commerce’s established
    practice of using a single surrogate country. Pl.-Interv.’s Br. at 17–20.
    If Commerce has a routine practice for addressing similar situations, it must
    either apply that practice or provide a reasonable explanation regarding why
    Commerce has deviated from that practice. See SKF USA, Inc. v. United States,
    
    263 F.3d 1369
    , 1382 (Fed. Cir. 2001) (“An agency action is arbitrary when the
    agency offers insufficient reasons for treating similar situations differently.”
    (internal citation omitted)); see also M.M. & P. Mar. Advancement, Training,
    Educ. & Safety Program v. Dep’t of Commerce, 
    729 F.2d 748
    , 755 (Fed. Cir.
    1984) (“An agency is obligated to follow precedent, and if it chooses to change, it
    must explain why.”); see also Cinsa, S.A. de C.V. v. United States, 
    21 CIT 341
    ,
    349, 
    966 F. Supp. 1230
    , 1238 (1997) (“Commerce can reach different
    determinations in separate administrative reviews but it must employ the same
    methodology or give reasons for changing its practice.”).
    
    19 C.F.R. § 351.408
    (c) provides that, “[f]or purposes of valuing the factors
    of production, . . . [Commerce] normally will value all factors in a single surrogate
    country.” 
    19 C.F.R. § 351.408
    (c), (c)(2). Commerce explained when
    promulgating its regulations that the preference for a single country is meant to
    prevent parties from “margin shopping,” and Commerce may depart from its
    regulatory preference for a single surrogate country when Commerce determines
    Court No. 22-00190                                                           Page 11
    that the “accuracy of available information regarding prices for particular factors in
    the surrogate country is ‘highly questionable,’” in which case Commerce may
    reject the questionable values and use data from a second country. Antidumping
    Duties; Countervailing Duties, 
    61 Fed. Reg. 7308
    , 7345 (Feb. 27, 1996).
    Commerce may use a secondary surrogate country if financial data are “inadequate
    or unavailable.” See Policy Bulletin 04.1 (“After all, a country that perfectly meets
    the requirements of economic comparability and significant producer is not of
    much use as a primary surrogate if crucial factor price data from that country are
    inadequate or unavailable.”).
    In evaluating surrogate value data, Commerce considers several factors,
    including whether the surrogate values are publicly available, contemporaneous
    with the period of review, representative of a broad market average, tax and duty-
    exclusive, and specific to the inputs being valued. See Policy Bulletin No. 04.1;
    see also Qingdao Sea-Line Trading Co. v. United States, 
    766 F.3d 1378
    , 1386
    (Fed. Cir. 2014) (citing the same factors). Commerce explained that comparable
    merchandise is determined on a case-by-case basis, the meaning of a significant
    producer can differ from case to case, and fixed standards have not been adopted in
    Commerce’s surrogate country selection process. See Policy Bulletin No. 04.1. In
    assessing whether a country is a significant producer of comparable merchandise,
    Commerce considers whether all of the potential surrogate countries have
    Court No. 22-00190                                                           Page 12
    significant exports of comparable merchandise, but does not consider levels of
    significance in comparison with other countries. See 
    id.
    Commerce determined that Romania, Russia, Malaysia, Turkey, Mexico,
    and Brazil were economically comparable to China. PDM at 15. Commerce
    selected Brazil as the primary surrogate country for valuing all of Senmao’s factors
    of production, except for the log inputs. Final IDM at 9. In reaching this
    determination, Commerce considered three financial statements that were placed
    on the record to calculate the financial surrogate values: (1) Brazilian company
    Eucatex S.A. Industria e Comercio (“Eucatex”); (2) Brazilian company Duratex
    S.A. (“Duratex”); and (3) Malaysian company Focus Lumber Berhad (“Focus
    Lumber”). See PDM at 15, 17; Senmao’s Surrogate Value Cmts. at Ex. 13
    (financial statement of Eucatex); AMMWF Surrogate Value Cmts. at Ex. 10
    (financial statement of Focus Lumber); AMMWF’s Additional Surrogate Value
    Cmts. (Nov. 8, 2021) at Ex. 3B, PR 200 (financial statement of Duratex).
    Commerce considered whether the financial statements were publicly available,
    contemporaneous with the period of review, representative of broad market
    averages, tax- and duty-exclusive, and specific to the inputs being valued. Id. at
    17. Commerce considered the financial data from the Brazilian and Malaysian
    companies, and determined that the Brazilian company Duratex’s data were
    preferable because Duratex was a producer of identical or comparable merchandise
    Court No. 22-00190                                                           Page 13
    (laminate flooring), the data were contemporaneous with the period of review, and
    the data were not questioned by its auditors. Id. In comparison, Commerce
    determined that the Brazilian company Eucatex’s data were less reliable because
    although the data were contemporaneous with the period of review and related to
    laminate flooring, Eucatex’s auditors provided a qualified opinion, thereby calling
    into question the reliability of the financial data. Id. Upon reviewing the various
    financial data from Brazil, Commerce selected Brazil as the primary surrogate
    country because Commerce determined that the Brazilian data contained useable
    data for valuing all of Senmao’s factors of production “except for the log inputs.”
    Id. Commerce failed, however, to cite any record evidence demonstrating that the
    Brazilian data on log inputs was highly questionable, inadequate, or unavailable,
    and would therefore warrant a departure from a single surrogate country.
    With respect to the log inputs using Malaysian data, Commerce failed to
    provide a reasonable explanation to depart from its established practice of using
    one surrogate country and failed to support its determination with substantial
    evidence. For example, Commerce reviewed the Malaysian company Focus
    Lumber’s financial data and determined that the Malaysian financial statements
    were publicly available, contemporaneous with the period of review, representative
    of broad market averages, tax- and duty-exclusive, and specific to the inputs being
    Court No. 22-00190                                                          Page 14
    valued. Id. In explaining why Commerce selected Malaysian import data specific
    to oak log inputs, Commerce stated:
    [W]e find it appropriate to select Brazil as the primary surrogate
    country because the record contains usable Brazilian data for valuing
    all of Senmao’s [factors of production] except for the log inputs. . . .
    While it is Commerce’s preference to value all inputs from a single
    surrogate country, we determine that record evidence demonstrates that
    the log inputs reported by Senmao are more accurately valued using
    Malaysian [surrogate values].
    Id. Notably, Commerce failed to cite any record evidence to support its
    determination that Brazil’s data on log inputs were either “highly questionable” or
    “inadequate or unavailable,” or that Malaysian data were more accurate to value
    log inputs. Although Commerce made a conclusory statement in the Preliminary
    Determination Memo that “record evidence demonstrates that the log inputs
    reported by Senmao are more accurately valued using Malaysian [surrogate
    values],” Commerce only cited generally to “[AMMWF’s Additional Surrogate
    Value Comments]” in support of its determination and did not cite to any specific
    documents on the record. Id. (emphasis added) (citing AMMWF’s Additional
    Surrogate Value Comments).
    In the Final IDM, Commerce also did not cite to any evidence to support its
    determination, stating only that:
    Commerce continues to value Senmao’s oak logs using Malaysian
    [surrogate values] 4403.91.1000 and non-oak logs using Malaysian
    basket category 4403.99.00, as these [surrogate values] constitute the
    Court No. 22-00190                                                           Page 15
    best available information on the record. . . . For Malaysia, the
    petitioner provided [Global Trade Atlas (“GTA”)] import data for logs
    classified under Malaysian HS 4403.91.1000 and HS 4403.99. Thus,
    the record includes import data from Malaysia that explicitly
    differentiates oak and other species of logs, as well as import data from
    Brazil that does not explicitly differentiate by log species. . . . Thus,
    considering the record evidence in its entirety, we have continued to
    value all of Senmao’s logs using Malaysian [surrogate values] in the
    final margin calculation.
    Final IDM at 22–23. Although Commerce referred generally to GTA import data,
    Commerce failed to cite any specific documents on the record to support its
    determination, despite its general declarations that the record includes evidence. In
    the Final IDM, Commerce stated, “See [Preliminary Surrogate Value
    Memorandum (Dec. 17, 2021), PR 210–11]” generally, but did not cite to any
    record evidence. Id. at 18 n.94.
    In the Preliminary Surrogate Value Memorandum, Commerce stated that:
    Commerce has determined that the Brazilian [surrogate values] on the
    record for the material inputs appear complete and viable in terms of
    the criteria set out above and we selected Brazil as the primary
    surrogate country. However, as also noted in the Preliminary
    Determination Memorandum, Commerce has determined that
    Malaysian [surrogate values] on the record are more specific to
    Senmao’s log inputs than are the Brazilian [surrogate values].
    Prelim. Surrogate Value Mem. at 2 (citing AMMWF’s Additional Surrogate Value
    Cmts.; PDM). Notably, in the Preliminary Surrogate Value Memorandum,
    Commerce attached various documents as exhibits, but failed to identify any
    Court No. 22-00190                                                             Page 16
    particular record documents on which Commerce relied. See Prelim. Surrogate
    Value Mem.
    In summary, Commerce in its Final IDM attempted to support its
    determinations with citations to record evidence, but Commerce referred only to
    GTA import data generally without citations to any particular documents; referred
    to the Preliminary Surrogate Value Memorandum without citations to any
    particular documents; referred to AMMWF’s Additional Surrogate Value
    Comments without citations to any particular documents; and referred to various
    court decisions and Policy Bulletin No. 04.1. See Final IDM at 18, 22–23.
    Because Commerce failed to identify any record evidence on which it relied, the
    Court holds that Commerce’s determinations are not supported by substantial
    evidence.
    Commerce noted in its Final IDM that “[i]t is not Commerce’s responsibility
    to build an adequate record for parties.” Id. at 22. Similarly, the Court notes that it
    is not the Court’s responsibility to sift through the record to attempt to identify
    which documents, if any, support Commerce’s determinations. Because
    Commerce failed to cite any record evidence demonstrating that the Brazilian data
    on log inputs were highly questionable, inadequate, or unavailable, and any
    evidence demonstrating that Malaysian data on log inputs were “the best available
    information” under 19 U.S.C. § 1677b(c)(1), the Court concludes that Commerce
    Court No. 22-00190                                                             Page 17
    did not provide a reasonable explanation for departing from its established practice
    of using a single surrogate country. The Court holds that Commerce’s
    determinations to select Brazil as the primary surrogate country and to value
    Plaintiff’s log inputs using Malaysian data are not in accordance with law and not
    supported by substantial evidence. The Court remands this issue for further
    explanation or reconsideration by Commerce.
    III.   Waiver of Plaintiff-Intervenor’s Argument That Malaysian Data
    Are Aberrational
    Plaintiff-Intervenor argues that Commerce’s determination to select
    Malaysia as a secondary surrogate country is unlawful because Commerce’s use of
    Malaysian log data caused an aberrational result and the margin of 39.27% in the
    Final Results “defies commercial and economic reality,” focusing on Plaintiff’s
    low margins in prior reviews and the margin of 0% in the Preliminary Results. See
    Pl.-Interv.’s Br. at 20–25. Defendant contends that Plaintiff-Intervenor waived this
    argument because of its failure to exhaust administrative remedies. Def.’s Resp. at
    18–20.
    Before commencing suit in the U.S. Court of International Trade, an
    aggrieved party must exhaust all administrative remedies available to it. “In any
    civil action . . . the Court of International Trade shall, where appropriate, require
    the exhaustion of administrative remedies.” 
    28 U.S.C. § 2637
    (d). The court
    Court No. 22-00190                                                               Page 18
    “generally takes a ‘strict view’ of the requirement that parties exhaust their
    administrative remedies.” Yangzhou Bestpak Gifts & Crafts Co. v. United States,
    
    716 F.3d 1370
    , 1381 (Fed. Cir. 2013) (citations omitted). 
    19 C.F.R. § 351.309
    (c)(2) requires that, “[t]he case brief must present all arguments that
    continue in the submitter’s view to be relevant to the . . . final determination or
    final results.” 
    19 C.F.R. § 351.309
    (c)(2). There are limited exceptions to the
    exhaustion requirement. See Pakfood Pub. Co. v. United States, 
    34 CIT 1122
    ,
    1145–48, 
    724 F. Supp. 2d 1327
    , 1351–53 (2010) (listing futility for the party to
    raise its argument at the administrative level and issues fully considered by
    Commerce as two generally recognized exceptions to the exhaustion doctrine); see
    also Holmes Prod. Corp. v. United States, 
    16 CIT 1101
    , 1104 (1992)
    (“[E]xhaustion may be excused if the issue was raised by another party, or if it is
    clear that the agency had an opportunity to consider it.”). Incorporation by
    reference to another party’s administrative argument is also among the exceptions
    this court has recognized to the exhaustion requirement. See Meihua Grp. Int’l
    Trading (Hong Kong) Ltd. v. United States, 
    47 CIT __
    , __, 
    633 F. Supp. 3d 1203
    ,
    1213 (2023).
    Plaintiff-Intervenor Lumber Liquidators filed a letter in lieu of an
    administrative case brief and raised objections by incorporating by reference the
    arguments made in Plaintiff’s administrative briefs. See Pl.-Interv.’s Reply at 8–9;
    Court No. 22-00190                                                              Page 19
    Lumber Liquidators’ Letter in Lieu of Admin. Case Br. at 2; Lumber Liquidators’
    Admin. Rebuttal Br. at 2. Plaintiff did not raise the argument, however, of
    Malaysian data being aberrational. See Senmao’s Admin. Case Br.; Senmao’s
    Admin. Rebuttal Br. The Court concludes that the exception of incorporation by
    reference does not exist because Plaintiff did not argue during the administrative
    proceeding that the Malaysian data were aberrational and thus Plaintiff-Intervenor
    waived this argument.
    In addition, Plaintiff-Intervenor argued for the first time during oral
    argument that the futility exception applies in this case because the high margins
    did not yet exist in the Preliminary Results. Recording of Oral Argument at 13:58–
    15:03, ECF No. 53. While this argument may have been persuasive if properly
    raised, the Court concludes that Plaintiff-Intervenor waived this argument because
    it did not include this argument in its moving or reply briefs. Issues raised for the
    first time at oral argument are waived. See Shell Oil Co. v. United States, 
    35 CIT 673
    , 702, 
    781 F. Supp. 2d 1313
    , 1338 (2011), aff’d, 
    688 F.3d 1376
     (Fed. Cir.
    2012) (holding that party’s argument was waived because it was raised for the first
    time at oral argument).
    The Court concludes, therefore, that Plaintiff-Intervenor waived the issue of
    Malaysian data being aberrational and cannot raise it before this Court.
    Court No. 22-00190                                                               Page 20
    IV.    Adjustment of Surrogate Value Data for Plywood
    Plaintiff argues that Commerce’s determination to revise the Brazilian
    surrogate value data for plywood is not supported by substantial evidence and not
    in accordance with law because Commerce deviated from its practice when it
    adjusted Brazilian plywood values to remove a line item reflecting Brazilian
    imports of plywood from Spain and did not provide any evidence that the Brazilian
    surrogate value for plywood is “aberrational in the aggregate.” Pl.’s Br. at 14–15.
    Defendant and Defendant-Intervenor contend that Commerce only applies
    the “aberrational in the aggregate” test when Commerce is deciding to exclude a
    large amount of data that appear unusually high or low, not when Commerce can
    readily determine that data are inaccurate, such as in this administrative review.
    Def.’s Resp. at 20–23; Def.-Interv.’s Resp. at 16–17. Plaintiff replies that this is
    the first time to its knowledge that the Government has made a distinction between
    “aberrational data” and “incorrect data.” Pl.’s Reply at 8.
    As noted previously, if Commerce has a routine practice for addressing
    similar situations, it must either apply that practice or provide a reasonable
    explanation regarding why Commerce has deviated from that practice. See SKF
    USA, Inc., 
    263 F.3d at 1382
    .
    Commerce stated that it did not apply the “aberrational in the aggregate” test
    when it revised the Brazilian surrogate data for plywood, reasoning that:
    Court No. 22-00190                                                           Page 21
    [T]here is prima facie evidence that the January 2020 Spanish import
    component of the Brazilian [surrogate value] is incorrect. Therefore,
    the concerns underlying Commerce’s practice of evaluating [surrogate
    values] in the aggregate are not present here. In this regard, Commerce
    evaluates [surrogate values] on an aggregate basis out of administrative
    convenience—to avoid the “impossible task” of identifying and
    defining “what is and what is not aberrational among . . . thousands of
    data points spread along a vast spectrum of relatively high and low
    values”—and to discourage the cherry-picking and manipulation of
    data.
    Final IDM at 10. Commerce determined that the data were inaccurate because “the
    Spanish import data in the Brazilian [surrogate value] for the month of January
    2020 reported the same quantity figures for M 3 [or cubic meters] as it does for kg,
    we conclude that this particular component of the Brazilian [surrogate value] is
    clearly incorrect.” Id. at 9.
    The Court concludes that Commerce has a standard practice of considering
    whether the average unit value (“AUV”) is aberrational in the aggregate for the
    economically comparable surrogate countries or as compared to historical AUVs
    of the surrogate country at issue. See SolarWorld Americas, Inc. v. United States,
    
    42 CIT __
    , __, 
    320 F. Supp. 3d 1341
    , 1351–52 (2018) (“Commerce explains that
    its practice is to assess aberrationality by examining HTS data both across potential
    surrogate countries and within the surrogate country over multiple years. . . . [and]
    considers import data to be aberrationally high if that data is ‘many times higher
    Court No. 22-00190                                                             Page 22
    than import values from other countries.’”). Interested parties need to demonstrate
    that the import data are aberrational in the aggregate. Id.
    Defendant asserts, however, that Commerce did not apply the “aberrational
    in the aggregate” test in this case, but rather disregarded clearly incorrect data as
    required by 19 U.S.C. § 1677b(c)(1) to value the factors of production based on the
    best available information regarding the values of such factors in order to
    determine the antidumping margins as accurately as possible. Def.’s Resp. at 22;
    see 19 U.S.C. § 1677b(c)(1).
    Commerce determined that the data were clearly inaccurate because “the
    Spanish import data in the Brazilian [surrogate value] for the month of January
    2020 reported the same quantity figures for M 3 as it does for kg,” explaining that:
    M3 and kg are discrete units of measurement where M3 is a
    measurement of volume and kg is a measurement of mass.
    Accordingly, it is illogical for the Spanish import data to report the
    same quantity in these two different units of measure. Because this
    component of the Brazilian [surrogate value] is incorrect, we conclude
    that the January 2020 Spanish import component in the Brazilian
    plywood [surrogate value] should be disregarded.
    Final IDM at 9 (citing AMMWF’s Surrogate Value Cmts at Ex. 9). Commerce
    states that Exhibit 9 “contains information on the density of certain wood species
    and wood products,” AMMWF’s Surrogate Value Cmts. at 3, but the Court
    observes that this document was apparently never placed on the record filed with
    the Court. The Court notes that AMMWF’s Surrogate Value Comments on the
    Court No. 22-00190                                                            Page 23
    record contain only Exhibits 1, 10A, and 10B, but do not include Exhibit 9.
    Because Commerce only cited to evidence that is not on the record to support its
    determination and the Court cannot review the exhibit, the Court concludes that
    Commerce’s explanation for its adjustment of the plywood measurement figures as
    clearly incorrect is neither in accordance with law nor supported by substantial
    evidence. The Court remands the issue of the plywood surrogate value data
    adjustment for further explanation or reconsideration by Commerce.
    V.     Calculation of Financial Ratios
    Plaintiff argues that Commerce’s calculation of the Brazilian financial ratios
    is not supported by substantial evidence because (1) Commerce’s treatment of
    “transport expenses” as manufacturing overhead constituted double-counting; and
    (2) Commerce incorrectly excluded certain interest income reported by Duratex to
    offset financial expenses. Pl.’s Br. at 19–21.
    In calculating the financial ratios, Commerce relied on data from Duratex’s
    2020 annual report and preliminarily did not include a line item for “transport
    expenses” in Duratex’s total selling, general, and administrative (“SG&A”)
    expenses to avoid double-counting outbound freight expenses that were accounted
    for elsewhere in the margin calculation, but revised the surrogate financial ratio to
    include Duratex’s “transport expenses” line item as part of its manufacturing
    overhead in the Final Results. Final IDM at 14. Commerce also preliminarily
    Court No. 22-00190                                                               Page 24
    included the full amount of Duratex’s reported interest income as an offset to its
    financial expenses when calculating Duratex’s net financial expenses for the wood
    division, but revised the surrogate financial ratio calculation to exclude this value
    from the offset to financial expenses in the Final Results. Id. at 15.
    A. “Transport Expenses”
    Plaintiff contends that Commerce’s treatment of “transport expenses” as
    overhead expenses constituted double-counting and unreasonably increased the
    financial ratios because “the estimated transport expenses are based on wood
    division selling expenses, which Commerce treats as SG&A and selling expenses”
    and are already included in the financial ratio calculations. Pl.’s Br. at 19.
    Plaintiff asserts that inventory value of raw materials includes freight expenses
    incurred on raw material purchases unless otherwise specified, and estimated
    freight expenses do not need to be included because those costs are included in the
    cost of products sold in Duratex’s financial statement. Id. at 20.
    Defendant and Defendant-Intervenor argue that it was reasonable for
    Commerce to assume that freight-in expenses were already included in the raw
    material expenses in Duratex’s financial statement and that “transport expenses”
    referred to transportation costs distinct from outbound freight and freight-in
    because this assumption is based on standard accounting practice. Def.’s Resp. at
    27; Def.-Interv.’s Resp. at 24.
    Court No. 22-00190                                                              Page 25
    Commerce explained that:
    [A]ccounting practice prescribes generally that raw materials inventory
    . . . is to be valued at a cost that includes all necessary expenditures to
    acquire and bring them to the desired condition and location for
    use . . . that includes not only the purchase price of the raw material,
    but also freight charges (most commonly referred to as “freight-in
    expenses”) on incoming materials and other miscellaneous expenses.
    Final IDM at 14. Commerce excluded the “transport expenses” line item in its
    calculation because:
    [W]e relied on the Duratex 2020 annual report submitted by the
    petitioner to calculate the surrogate financial ratios, using data for
    Duratex’s “wood division.” Regarding the “transport expenses” line
    item, we excluded this amount in our calculation of total SG&A
    expenses in the surrogate financial ratio calculation to avoid potentially
    double counting outbound freight expenses that were accounted for
    elsewhere in the margin calculation. However, we have reconsidered
    this approach for the final results because there is no indication, either
    on the face of the income statement itself or in the accompanying notes,
    as to what specifically this item includes or to what activities it relates.
    Id. (citing Prelim. Surrogate Value Mem. at 6, Att. 1).
    Commerce relied on the surrogate financial ratios calculated from Duratex’s
    financial statement based on Duratex’s reported wood division, with overhead
    expenses at 16.01%, SG&A expenses at 14.19%, and profit at 12.72%. Prelim.
    Surrogate Value Mem. at 6 (citing AMMWF’s Additional Surrogate Value Cmts.
    at Exs. 3A (Duratex’s 2020 annual report) & 3B (Duratex’s financial statement)).
    In the Final IDM, Commerce considered Senmao’s argument in its
    administrative rebuttal brief that raw material inventory values do not include
    Court No. 22-00190                                                           Page 26
    freight-in expenses and determined that “transport expenses” in Duratex’s financial
    statement did not include outbound freight expenses, stating that:
    It is reasonable for our purposes to presume that the “raw materials and
    consumption materials” line item in Duratex’s financial statement
    includes freight-in expenses, and that the “transport expenses” line item
    represents a distinct cost element. In this case, we find that it is both
    reasonable and solidly grounded in accounting practice and procedure
    to classify the “transport expenses” line item as overhead, as it likely
    relates to other factory activities (e.g., within-factory transportation,
    vehicles used by factory management, etc.), and because the raw
    material value likely includes incoming freight. Moreover, treating
    “transport expenses” as an overhead is consistent with our practice in
    other cases involving similar line items, such as Activated Carbon from
    China 2012–13 (“travel and transportation” expenses) and Steel Tie
    Wire from China (“transportation” expenses).
    Final IDM at 14.
    In Certain Activated Carbon From the People’s Republic of China,
    Commerce noted that its:
    Accounting practice prescribes generally that raw materials inventory
    on a company’s balance sheet is to be valued at a cost that includes all
    necessary expenditures to acquire such materials and bring them to the
    desired condition and location for use in the manufacturing process[,
    where this] valuation includes not only the purchase price of the raw
    material, but also freight charges (most commonly referred to as
    “freight-in”) on incoming materials and other miscellaneous expenses
    such as handling or insurance incurred by the buyer related to the
    purchase. . . . Accordingly, for the final results, we continue to treat
    “travel and transportation” expenses . . . under cost of goods sold as an
    overhead item in our surrogate financial ratio calculations.
    Certain Activated Carbon From the People’s Republic of China, 
    79 Fed. Reg. 70,163
     (Dep’t of Commerce Nov. 25, 2014) (final results of antidumping duty
    Court No. 22-00190                                                            Page 27
    admin. review; 2012–2013), and accompanying Issues and Decision
    Memorandum. In Prestressed Concrete Steel Rail Tie Wire from the People’s
    Republic of China, Commerce confirmed its established practice of including
    transportation expenses as manufacturing overhead, especially when the financial
    statement contains a separate transport expenses line item. Prestressed Concrete
    Steel Rail Tie Wire from the People’s Republic of China, 
    79 Fed. Reg. 25,572
    (Dep’t of Commerce May 5, 2014) (final determination of sales at less than fair
    value), and accompanying Issues and Decision Memorandum.
    The Court concludes that there is an established accounting practice to
    include transportation expenses as part of manufacturing overhead in the SG&A
    expenses. Commerce provided a reasonable explanation based on evidence of
    Duratex’s financial statement and made a determination consistent with established
    accounting practices. The Court concludes that Commerce’s treatment of the
    “transport expenses” line item as an overhead expense and its determination that
    that the raw material value likely included incoming freight in the financial ratio
    calculations are in accordance with law and supported by substantial evidence.
    B. Interest Income
    Plaintiff contends that only the income for remuneration on financial
    investments is potentially not related to short-term, while the other line items are
    all short-term in nature—foreign exchange variances (related to net gains and
    Court No. 22-00190                                                             Page 28
    losses on transactions denominated in foreign currencies during fiscal year),
    indexation arguments (effectively adjust asset values for impact of inflation or
    other factors during fiscal year), and interest and discounts obtained (related to
    revenue received from lenders on bank deposits)—and should have been included
    as an offset to financial expenses in Commerce’s calculations. Pl.’s Br. at 21.
    Defendant asserts that Plaintiff does not deny that the line item for
    remuneration on financial investments is potentially a long-term financial activity,
    that it was reasonable for Commerce to exclude the line item due to uncertainty,
    and that there is insufficient information in Duratex’s financial statement and
    record evidence for Commerce to determine whether these categories of interest
    income were long-term or short-term in nature. Def.’s Resp. at 29–30. Defendant-
    Intervenor argues that Plaintiff fails to cite record evidence to support its assertions
    about the short-term nature of the line items. Def.-Interv.’s Br. at 26. Plaintiff
    replies that Commerce cites only one case in support of its alleged practice and
    cites no record evidence in support of its conclusions. Pl.’s Reply at 16–17.
    The first question in calculating an offset is whether the interest income is
    short-term or derived from current assets or working capital accounts. Pakfood
    Pub. Co., 34 CIT at 1152, 
    724 F. Supp. 2d at 1357
    . The burden of proof is on the
    respondent to substantiate and document the nature of accounts when making a
    claim for an offset, and Commerce will not allow an offset when a respondent
    Court No. 22-00190                                                            Page 29
    cannot demonstrate that the interest income in question is short-term in nature. Id.;
    see also Certain New Pneumatic Off-the-Road Tires from the People’s Republic of
    China, 
    77 Fed. Reg. 14,495
     (Dep’t of Commerce Mar. 12, 2012) (final results of
    the 2009–2010 antidumping duty admin. review and final recission, in part), and
    accompanying Issues and Decision Memorandum at Cmt. 7 (“The Department’s
    well-established practice is to allow an offset to interest expenses with short-term
    interest income . . . [and it] is the Department’s practice to exclude interest income
    generated from long-term financial assets.”).
    Commerce preliminarily included the full amount of Duratex’s reported
    interest income as an offset to its financial expenses when calculating Duratex’s
    net financial expenses for the wood division, but revised the surrogate financial
    ratio calculation to exclude this value from the offset to financial expenses in the
    final determination. Final IDM at 14–15 (citing PDM; Prelim. Surrogate Value
    Mem. at Att. 1). Duratex’s annual report included five line items: “renumeration
    on financial investments,” “foreign exchange variances,” “indexation adjustment,”
    “interest and discounts obtained,” and “other.” See Final Surrogate Value and
    Calculation Mem. (June 24, 2022), PR 246–47; AMWWF’s Additional Surrogate
    Value Cmts. at Ex. 3A.
    In the Final IDM, Commerce explained that:
    We also excluded additional line items for which we cannot determine
    Court No. 22-00190                                                          Page 30
    whether interest income is long-term or short-term in nature.
    Commerce cannot assume that this interest income is short-term
    because there is no additional description in the surrogate financial
    statement on interest income, and it is Commerce’s practice not to look
    behind surrogate financial statements.
    Final IDM at 15 (citing Final Surrogate Value and Calculation Mem.). Commerce
    provided the same explanation in the Final Surrogate Value and Calculation
    Memorandum. Final Surrogate Value and Calculation Mem. at 2 (citing
    AMWWF’s Additional Surrogate Value Cmts. at Ex. 3B, “Note 27 – Financial
    Income”).
    Commerce excluded interest income generated from long-term financial
    assets because it determined based on a review of record evidence of Duratex’s
    financial statement that such income was related to long-term investing activities.
    Final IDM at 15. Commerce also excluded line items for which it could not
    determine whether the interest income was long-term or short-term in nature. 
    Id.
    The Court concludes that Commerce’s determinations in this case were consistent
    with its established practice as described in Pakfood Pub. Co. because Commerce
    did not allow offsets when it could not determine whether the interest income in
    question was short-term in nature.
    The Court concludes that Commerce’s calculation of financial ratios is in
    accordance with law and supported by substantial evidence. Accordingly, the
    Court sustains Commerce’s calculation of financial ratios.
    Court No. 22-00190                                                           Page 31
    VI.    Denial of By-Product Offset
    Plaintiff argues that Commerce’s denial of its by-product offset is not in
    accordance with law because (1) Commerce’s determination is inconsistent with
    Commerce’s past treatment of Plaintiff and (2) Commerce should have provided
    Plaintiff with an additional opportunity to submit information regarding its claimed
    by-product offset. Pl.’s Br. at 22–26.
    Commerce denied Plaintiff’s claim for a by-product offset, explaining that
    “[i]n [non-market economy] proceedings specifically, because we rely upon [a
    factors of production] methodology, we do not grant claims for a by-product offset
    where the companies are not able to provide data for their by-product production
    during the [period of review].” Final IDM at 26. It is generally Commerce’s
    practice to grant an offset to normal value, for sales of by-products generated
    during the production of subject merchandise, if the respondent can demonstrate
    that the by-product is either resold or has commercial value and re-enters the
    respondent’s production process. Arch Chems, Inc. v. United States, 
    35 CIT 424
    ,
    426 (2011) (citing Ass’n of Am. School Paper Suppliers v. United States, 
    32 CIT 1196
    , 1205 (2008)). The burden rests on the respondents to substantiate by-
    product offsets by providing Commerce with sufficient information to support their
    claims. 
    Id.
     (citation omitted).
    Court No. 22-00190                                                            Page 32
    The Section C and D Questionnaire included the following language
    regarding by-product offsets:
    By-product/co-product offsets are only granted for merchandise that is
    either sold or reintroduced into production during the [period of
    review], up to the amount of that by-product/co-product actually
    produced during the [period of review]. If you are claiming a by-
    product or co-product offset in your [factors of production] database,
    please report each by-product or co-product in a separate field.
    See Jiangsu Senmao’s Sec. C and D Questionnaire Resp. (April 29, 2021) at 17,
    PR 145. In its questionnaire response, Plaintiff stated that it “does not track the
    quantity of the wood scrap generated during the [period of review] and only
    records the quantity of wood scrap sold [and it] did not record the actual
    consumption of wood scrap as fuel to generate steam.” 
    Id.
     Plaintiff also stated
    that it could not provide production records because it does not track actual wood
    scrap quantity generated. 
    Id. at 18
    .
    Commerce explained that it denied the by-product offset due to Commerce’s
    practice:
    [I]n considering a by-product offset, Commerce examines whether the
    by-product was produced from the quantity of the [factors of
    production] reported and whether the respondent’s production process
    for the merchandise under consideration actually generated the amount
    of the by-product claimed as an offset. Commerce has stated that
    “{s}crap sold but not produced during the [period of investigation]
    should not be included within the scrap offset because it would be
    unreasonable to offset the cost during the [period of investigation] for
    scrap produced prior to the [period of investigation].” Furthermore,
    Commerce’s practice ensures that a respondent does not receive a by-
    Court No. 22-00190                                                           Page 33
    product offset for products generated in the production of non-subject
    merchandise. Commerce’s methodology ensures the accuracy of its
    dumping calculations in [non-market economy] proceedings.
    Therefore, we are following this methodology for these final results,
    consistent with our general practice in [a non-market economy]
    proceeding.
    Final IDM at 26–27.
    A. Previous Administrative Reviews
    Plaintiff asserts that Commerce’s denial of its by-product offset is
    inconsistent with Commerce’s treatment of Plaintiff in previous administrative
    reviews and that Commerce failed to explain why its practice of requiring
    production records to grant a by-product offset was not followed in prior
    administrative reviews because there are not new facts to justify different treatment
    in this administrative review. Pl.’s Br. at 22–25; Pl.’s Reply at 18–19.
    Defendant and Defendant-Intervenor assert that Commerce reasonably
    denied a by-product offset because Plaintiff lacked production records indicating
    the quantity of scrap during the period of review and each administrative review is
    independent in nature. Def.’s Resp. at 31–34; Def.-Interv.’s Resp. at 27–30.
    Commerce denied Plaintiff a by-product offset for wood scrap generated
    through wood flooring production because Plaintiff reported that it did not track
    the quantity of the wood scrap generated, only the quantity sold, during the period
    of review. See Final IDM at 26; PDM at 25; see Jiangsu Senmao’s Sec. C and D
    Court No. 22-00190                                                           Page 34
    Questionnaire Resp. at 17–18. Plaintiff contends that Commerce has an
    established practice because it did not deny a by-product offset in prior reviews
    despite a lack of production records. Pl.’s Br. at 22–23 (citing Multilayered Wood
    Flooring from the People’s Republic of China (“Final Results 2014–2015 Admin.
    Review”), 
    82 Fed. Reg. 25,766
     (Dep’t of Commerce June 5, 2017) (final results of
    antidumping duty admin. review, final determination of no shipments, and final
    partial rescission of antidumping duty admin. review; 2014–2015), and
    accompanying Issues and Decision Memorandum (“Senmao’s 2014–2015 Admin.
    Review IDM”); Multilayered Wood Flooring from the People’s Republic of China
    (“Final Results 2015–2016 Admin. Review”), 
    83 Fed. Reg. 35,461
     (Dep’t of
    Commerce July 26, 2018) (final results of antidumping duty admin. review, final
    determination of no shipments, and partial rescission; 2015–2016), and
    accompanying Issues and Decision Memorandum (“Senmao’s 2015–2016 Admin.
    Review IDM”); Multilayered Wood Flooring from the People’s Republic of China
    (“Preliminary Results 2018–2019 Admin. Review”), 
    86 Fed. Reg. 22,016
     (Dep’t of
    Commerce Apr. 26, 2021) (prelim. results of the antidumping duty admin. review,
    prelim. determination of no shipments, prelim. successor-in-interest determination,
    and rescission of review, in part; 2018–2019), and accompanying Decision
    Memorandum (“Senmao’s 2018–2019 Admin. Review PDM”); Multilayered
    Wood Flooring From the People’s Republic of China (“Final Results 2018–2019
    Court No. 22-00190                                                           Page 35
    Admin. Review”), 
    86 Fed. Reg. 59,987
     (Dep’t of Commerce Oct. 29, 2021) (final
    results of antidumping duty admin. review, final successor-in-interest
    determination, and final determination of no shipments; 2018–2019), and
    accompanying Issues and Decision Memorandum (“Senmao’s 2018–2019 Admin.
    Review IDM”).
    Commerce’s practice is to grant an offset to normal value for sales of by-
    products generated during the production of subject merchandise if the respondent
    can demonstrate that the by-product is either resold or has commercial value and
    re-enters the respondent’s production process. Arch Chems., 35 CIT at 426.
    Commerce determined in this administrative review that Senmao lacked
    production records, and denied a by-product offset because Plaintiff was unable to
    demonstrate that the by-product was either resold or had commercial value and re-
    entered Plaintiff’s production process. Final IDM at 26.
    In the 2014–2015 administrative review, Commerce determined that Senmao
    was entitled to a by-product offset despite a lack of production records because
    “[a]t verification, the Department not only observed how wood scrap was
    generated and collected, but also how the reported by-product (i.e., wood scrap)
    sales could be tied to the sales general ledger for other income with sales invoices,
    sales [value added tax] invoices, receipts, accounting vouchers, and warehouse-
    in/out slips” and “Senmao produced no products during the [period of review]
    Court No. 22-00190                                                          Page 36
    which were not subject merchandise; and thus, all wood scrap sold would be a by-
    product from subject merchandise.”Final Results 2014–2015 Admin. Review, 
    82 Fed. Reg. 25,766
    ; Senmao’s 2014–2015 Admin. Review IDM at Cmt. 13.
    Commerce determined that Senmao was eligible for a scrap offset based on
    Commerce’s observations during verification. 
    Id.
    Commerce denied a by-product offset for Senmao in the 2012–2013
    administrative review because Senmao was unable to substantiate that it produced
    any of the scrap that it sold during the period of review, but Commerce determined
    that the facts in the 2014–2015 administrative review were different from the facts
    in the 2012–2013 administrative review. Senmao’s 2014–2015 Admin. Review
    IDM; see Multilayered Wood Flooring from the People’s Republic of China, 
    80 Fed. Reg. 41,476
     (final results of antidumping duty admin. review and final results
    of new shipper review; 2012–2013) (Dep’t of Commerce July 15, 2015), and
    accompanying Issues and Decision Memorandum.
    In the 2015–2016 administrative review, Commerce again determined that
    Senmao was entitled to a by-product offset despite a lack of production records
    because “[a]lthough we did not conduct verification of Jiangsu Senmao’s
    questionnaire responses during this segment of the proceeding, we did so during
    the immediately preceding (i.e., the 2014–2015) review.” Final Results 2015–
    Court No. 22-00190                                                             Page 37
    2016 Admin. Review, 
    83 Fed. Reg. 35,461
    ; Senmao’s 2015–2016 Admin. Review
    IDM at Cmt. 4.
    In the administrative reviews during the years 2016–2017, 2017–2018, and
    2018–2019, no party argued that Senmao’s by-product offset should be denied.
    See Multilayered Wood Flooring from the People’s Republic of China, 
    84 Fed. Reg. 38,002
    -01 (Dep’t of Commerce Aug. 5, 2019) (final results of antidumping
    duty admin. review and final results of new shipper review; 2016–2017), and
    accompanying Issues and Decision Memorandum (“Senmao’s 2016–2017 Admin.
    Review IDM”) (determination did not discuss the issue of Senmao’s by-product
    offset); Multilayered Wood Flooring from the People’s Republic of China, 
    85 Fed. Reg. 78,118
     (Dep’t of Commerce Dec. 3, 2020) (final results of antidumping duty
    admin. review and final results of new shipper review; 2017–2018), and
    accompanying Issues and Decision Memorandum (“Senmao’s 2017–2018 Admin.
    Review IDM”) (determination in which Senmao was not selected as a voluntary
    respondent); Preliminary Results 2018–2019 Admin. Review, 
    86 Fed. Reg. 22,016
    ;
    Senmao’s 2018–2019 Admin. Review PDM (determination in which Commerce
    made an offset to Senmao’s reported factors of production for by-product because
    “Senmao provided production records demonstrating it reported recovered
    quantities of the by-product and that it later sold these recovered quantities.”);
    Final Results 2018–2019 Admin. Review, 
    86 Fed. Reg. 59,987
    ; Senmao’s 2018–
    Court No. 22-00190                                                            Page 38
    2019 Admin. Review Final IDM (no changes made to by-product offset
    determination).
    In the 2018–2019 administrative review, Senmao provided Commerce with
    production records demonstrating that it reported recovered quantities of the by-
    product and that it later sold these recovered quantities during the 2018–2019
    period of review, and Commerce granted an offset as a result. See Senmao’s
    2018–2019 Admin. Review PDM; Senmao’s 2018–2019 Admin. Review Final
    IDM.
    The Court does not agree with Plaintiff’s assertion that an established
    practice exists that Commerce will grant a by-product offset to Senmao despite a
    lack of evidence, based only on two administrative reviews granting the offset after
    verification, followed by three years of no by-product offsets being granted on
    such basis. See Senmao’s 2016–2017 Admin. Review IDM; Senmao’s 2017–2018
    Admin. Review IDM; Senmao’s 2018–2019 Admin. Review PDM; Senmao’s
    2018–2019 Admin. Review Final IDM.
    The Court concludes that an existing practice does not exist and it was
    reasonable for Commerce to deny a by-product offset because Plaintiff failed to
    provide information to substantiate a by-product offset. The Court sustains
    Commerce’s denial of an offset due to a lack of evidence as reasonable and in
    accordance with law.
    Court No. 22-00190                                                             Page 39
    B. Opportunity to Submit Additional Information
    Plaintiff contends that Commerce should have provided Plaintiff with an
    opportunity to submit additional information regarding its claimed by-product
    offset because Plaintiff has a substantial “reliance interest” in the required reported
    practices pursuant to 19 U.S.C. § 1677m(d). Pl.’s Br. at 25–26. 19 U.S.C.
    § 1677m(d) states:
    If the administering authority or the Commission determines that a
    response to a request for information under this subtitle does not
    comply with the request, the administering authority or the Commission
    (as the case may be) shall promptly inform the person submitting the
    response of the nature of the deficiency and shall, to the extent
    practicable, provide that person with an opportunity to remedy or
    explain the deficiency in light of the time limits established for the
    completion of investigations or reviews under this subtitle.
    19 U.S.C. § 1677m(d) (emphasis added). Defendant and Defendant-Intervenor
    assert that Commerce is not obligated to ask additional questions when the
    respondent states that it does not possess the requested information. Def.’s Resp.
    at 34–35; Def.-Interv.’s Resp. at 29–30.
    The Court concludes that Commerce was reasonable in not providing
    another opportunity for Plaintiff to submit the missing production records. The
    operable language in 19 U.S.C. § 1677m(d) is “to the extent practicable,” and
    Plaintiff already stated that it did not track the quantity of wood scrap generated
    during the period of review. Thus, even if Commerce allowed another opportunity
    Court No. 22-00190                                                             Page 40
    for Plaintiff to produce the requested information, Plaintiff already stated that it did
    not keep records of the quantity of wood scrap necessary to demonstrate that it was
    entitled to a by-product offset. Accordingly, Commerce’s denial of an offset by-
    product is reasonable and in accordance with law.
    CONCLUSION
    For the foregoing reasons, the Court remands for further consideration
    consistent with this Opinion: (1) Commerce’s determination to select Brazil as the
    primary surrogate country while using data for log inputs from the secondary
    surrogate country of Malaysia, and (2) Commerce’s determination to revise the
    Brazilian surrogate value data for plywood. The Court sustains Commerce’s
    calculation of the Brazilian financial ratios and Commerce’s denial of Plaintiff’s
    by-product offset. Plaintiff-Intervenor waived its argument that the Malaysian data
    were aberrational.
    Accordingly, it is hereby
    ORDERED that Plaintiff’s Motion for Judgment upon the Agency Record
    Pursuant to USCIT Rule 56.2, ECF No. 38, is granted in part and denied in part;
    and it is further
    ORDERED that Plaintiff-Intervenor’s Rule 56.2 Motion for Judgment on
    the Agency Record, ECF No. 39, is granted in part and denied in part; and it is
    further
    Court No. 22-00190                                                           Page 41
    ORDERED that that this case shall proceed according to the following
    schedule:
    (1) Commerce shall file its remand determination on or before October 25,
    2023;
    (2) Commerce shall file the administrative record on or before November 8,
    2023;
    (3) Comments in opposition to the remand determination shall be filed on or
    before December 8, 2023;
    (4) Comments in support of the remand determination shall be filed on or
    before January 8, 2024; and
    (5) The joint appendix shall be filed on or before January 22, 2024.
    /s/ Jennifer Choe-Groves
    Jennifer Choe-Groves, Judge
    Dated: August 25, 2023
    New York, New York