CIT Says Commerce Properly Relied on Steel Fitting Maker's Reported Costs in AD Case
The Commerce Department properly relied on respondent Shakti Forge Industries' reported costs in the antidumping duty investigation on forged steel fittings from India, the Court of International Trade held on May 6. Sustaining the investigation after two remands, Judge Stephen Vaden said Commerce permissibly found Shakti's costs to be accurate after conducting an in-person verification of the respondent's facilities during the second remand period.
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Vaden previously remanded the case twice due to Commerce's decision to use a questionnaire in lieu of on-site verification due to COVID-19-related travel concerns (see 2308210025). After the second remand, the agency conducted an in-person verification and found "no discrepancies in Shakti's reported costs."
The petitioners, led by Bonney Forge, challenged the agency's findings, arguing that Commerce failed to conduct a "meaningful verification" of the respondent's reported finishing costs. Shakti reported that its finished products could undergo one of three finishing processes, or a combination of all three, based on the "availability of the machine" and the market where the product is sold.
When a conventional lathe is unavailable, Shakti may use a "computer numerical control machine to complete the finishing. During the on-site verification, Commerce saw that the different finishing machines were "adjacent to each other" and found the respondent's explanation of its production costs to be reasonable. Bonney Forge argued that Shakti didn't limit use of the "more expensive computer numerical control machines to products bound for the United States," implying that the respondent may have manipulated its dumping margin by "shifting costs from some products to others."
Vaden sustained Commerce's review of Shakti's reported costs, noting that the agency conducted its verification with the petitioners' "objections in mind." Ultimately, Commerce reasonably accepted Shakti's explanation that it "uses computer numerical control machines when other, less sophisticated machines are not available."
The agency also reviewed records relating to Shakti's two highest-volume control numbers and didn't find a "single inaccuracy." Contrary to the petitioners' argument, Commerce didn't have to "keep searching through more data at the chance of finding an error," Vaden said, noting that verification is a "spot check." Even the petitioners concede that the data Commerce reviewed was correct, the judge said, citing an exchange with petitioners' counsel from oral argument.
While Bonney Forge argued that Commerce should have used AFA for Shakti's finishing costs, Vaden rejected this claim and found that the petitioners "misunderstand the statutory scheme." The agency can't use AFA, since it can't even rely on facts otherwise available, given that there's no actual gap in the record.
Lastly, the judge rejected a "semantic argument" from Bonney Forge, which rested on Shakti's description of its production process. The respondent said an item can undergo any of the three finishing processes depending on the market where the product is being sold "and" depending on the availability of the machines where the product is made. However, the petitioners noted that the U.S. substituted the word "or" for "and" when quoting Shakti's explanation.
Bonney Forge said this "changes the meaning," indicating the respondent couldn't just switch to a computer numerical control machine "just because the conventional lathe machines were unavailable." The U.S. said it was just "paraphrasing Shakti, not quoting its statement." Vaden sided with the government, finding that the term "and" doesn't "always create a conjunctive list where every item in the list must be satisfied for the condition to be met."
(Bonney Forge Corp. v. United States, Slip Op. 25-56, CIT # 20-03837, dated 05/06/25; Judge: Stephen Vaden; Attorneys: William Fennell of Schagrin Associates for plaintiffs led by Bonney Forge Corp.; Kara Westercamp for defendant U.S. government; Sezi Erdin of Trade Pacific for defendant-intervenor Shakti Forge Industries Pvt Ltd.)