CIT Upholds Commerce's Knowledge Test on Whether Sales 'for Consumption' in Home Market
The Court of International Trade on July upheld the Commerce Department's finding on remand that antidumping duty respondent Megaa Moda didn't have either actual or constructive knowledge that its sales to an unnamed company were destined for export to the U.S. Judge Thomas Aquilino said that while he may have come to a different conclusion upon reviewing the evidence de novo, it's not the court's role to substitute its judgment for Commerce's when the choice is "between two conflicting views."
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Previously, Aquilino rejected Commerce's finding that some of Megaa Moda's home market sales, which were included as part of the company's normal value calculation in the 2021-22 AD review of frozen warmwater shrimp from India, weren't made "for consumption" in that market (see 2408210040). The judge said the agency can't just use a prior CIT decision to say the agency can't use the trade patterns of a company's customers to find that the sales aren't for consumption.
On remand, Commerce stuck with its finding after looking into the respondent's claim it sold unbranded shrimp because the product is exempt from an Indian goods and services tax, not because it knew the shrimp would be exported overseas (see 2411270055). While no party contested that Megaa Moda didn't have actual knowledge the goods were destined for export, the question was whether the respondent had constructive knowledge of this reality. The result was a 7.92% AD rate for Megaa Moda.
The petitioners, the Ad Hoc Shrimp Trade Action Committee and American Shrimp Processors Association, challenged the remand results, arguing that Commerce misstated the knowledge test by conflating knowledge of whether goods were sold for export with knowledge of whether they were sold for consumption in the home market, which is the statutory standard. The petitioners said the agency should have required the respondent to affirmatively show the sales were for home market consumption, adding that export of the goods to any foreign market "necessarily eliminates any possibility of consumption in the home market."
Instead, Commerce said the respondent only needed to have actual or constructive knowledge "the sales were not for home consumption," adding that the petitioners failed to exhaust their administrative remedies on this point. Aquilino only agreed in part regarding the agency's exhaustion defense, finding that the petitioners "have consistently argued that the indicia of the contested sales showed that they could not have been for consumption in the home market but were destined for export."
If the test is for knowledge of whether sales weren't for consumption in the home market, "determining knowledge of whether sales were meant for export is simply another way of characterizing that test," the judge said.
The court held that Commerce reasonably found that "some subject merchandise could be exported and still 'consumed' in the home market for purposes of calculating normal value if the customer transformed the merchandise into non-subject merchandise before exportation." The agency ultimately found, based on the record before it, that Megaa Moda had neither actual nor constructive knowledge that some of its sales were meant for export, since there's no "affirmative" evidence.
Aquilino held that, whether exhaustion applies or not, Commerce's method of analyzing the petitioners' arguments on whether the respondent had constructive knowledge "is not unreasonable." The judge said the agency "was left with considering Megaa Moda’s constructive knowledge of the destiny of the contested sales as derived from the extrinsic sources of record" out of necessity. The court thus can't conclude on the current record that Commerce's "method of analysis was inappropriate," Aquilino said.
The judge then turned to whether Commerce meaningfully grappled with evidence that detracts from its conclusion. The petitioners argued that various sales made by Megaa Moda to an unnamed company had qualities of goods made for export. Commerce said the record had insufficient evidence indicating that these qualities, which were redacted from CIT's decision, are "exclusive" qualities of export sales. The petitioners said whether or not that's true, it's "unreasoanble to infer" that those are "not indicative qualities of export sales."
Aquilino said that while he sees merit in the petitioner's argument, it's not his place to substitute his judgment for Commerce's. The judge said he can't “conclude that the agency’s determination implicating this 'contrary' evidence is unreasonable.”
(Ad Hoc Shrimp Trade Action Committee v. United States, Slip Op. 25-85, CIT Consol. # 23-00202, dated 07/08/25; Judge: Thomas Aquilino; Attorneys: Nathaniel Rickard of Picard Kentz for plaintiff Ad Hoc Shrimp Trade Action Committee; Roger Schagrin of Schagrin Associates for plaintiff-intervenor American Shrimp Processors Association; Kara Westercamp for defendant U.S. government; Robert Gosselink of Trade Pacific for defendant-intervenor Megaa Moda Private Limited)