Indian Gov't Properly Audited Exporter's Imported Input Consumption, Briefs Say
The Government of India and exporter Balkrishna Industries replied to petitioner Titan Tire Corp.'s arguments against the Commerce Department's finding that Balkrishna didn't use or benefit from India's Advanced Authorization Scheme in the 2021 countervailing duty review on new pneumatic off-the-road tires from India. The Indian government said neither Commerce nor the petitioner had reason to doubt the fact that Balkrishna hadn't benefited from the program, while Balkrishna argued that the Indian government properly verified the information at issue (Titan Tire Corp. v. United States, CIT # 23-00233).
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In the original CVD investigation, Commerce said the Advanced Authorization Scheme is a countervailable export subsidy that gives import duty exemptions to Indian exporters, basing this finding on the Indian government's failure to show at verification that the state's Norms Committee uses an adequate procedure to ensure that Balkrishna's norms show actual consumption. The agency reversed course in the 2021 review after finding that the Indian government conducted an examination of the inputs involved to confirm which inputs are consumed in the production of the subject merchandise and in what amounts.
Titan Tire contested the move at the Court of International Trade, arguing that the finding was rooted in the Indian government's "flawed examination" (see 2311300011).
In its response, the Indian government said Titan Tire implied that the Indian government and Balkrishna acted "inappropriately" and somehow manipulated its audit report, which it submitted to the agency during verification. The Indian government said this claim "has no basis in fact and should be rejected." The brief said the government has a "robust and reasonable process" that properly verifies the inputs used without the need for an audit report. The Indian government said it believes either that "the normal procedure or the separate verification is adequate to demonstrate that" Balkrishna didn't receive a countervailable benefit.
The brief added that there's no evidence that the Indian government and Balkrishna "coordinated in any way that would render the Audit Report unreliable." The audit report isn't "cursory" or "incomplete" as Titan Tire suggests and, instead, "explains at length the measures undertaken" by India's Directorate General of Foreign Trade "to verify the information submitted by" Balkrishna, including an "on-site verification," the brief said.
Meanwhile, Balkrishna took issue with Titan Tire's position that the regulation at issue, 19 C.F.R. § 351.519(a)(4)(ii), requires the Indian government to "calculate and determine the consumption and wastage figures, not just to verify the information reported by the respondent." Balkrishna said the problem with this claim is that the petitioner "failed to exhaust" it before Commerce, adding that even if this wasn't the case, the "plain language, the purpose, and the history of section 351.519(a)(4)(ii) establish that the government in question performs the requisite examination when it reviews the accuracy of information submitted by the respondent in the manner that" the Indian government did here.
The exporter also argued that the court should sustain the validity of the audit report, claiming that Titan Tire "has not offered any evidence undermining the accuracy and reliability of the Audit Report." The brief said Titan Tire's position "is based on pure speculation."