August 23, 1999

Hon. Raymond F. Burghardt
Clerk of the Court
United States Court of
International Trade
One Federal Plaza
New York, New York 10007

Re: Mitsubishi Heavy Industries, Ltd. v. United States, Court No. 96-10-02292

Dear Mr. Burghardt:

Pursuant to the Court's order of May 26, 1999, I am transmitting the Department of Commerce's Second Remand Determination in the above-captioned case. This case concerns the challenges to the Final Determination of Sales at Less Than Fair Value: LNPP, and Components Thereof, Whether Assembled or Unassembled, from Japan, 61 Fed. Reg. 38,139 (July 23, 1996), as amended by Antidumping Duty Order and Amendment to Final Determination of Sales at Less Than Fair Value: LNPP, and Components Thereof, Whether Assembled or Unassembled, from Japan, 61 Fed. Reg. 46,621 (Sept. 4, 1996).

Supplemental documents collected or prepared during the conduct of this Second Remand Determination will be filed under separate cover.

Should any questions arise regarding this submission, please contact me at (202) 482-0082.

Respectfully submitted,

Robert J. Heilferty
Senior Attorney
Office of the Chief Counsel
for Import Administration

Enclosure

cc:

James Holl, Esq.
DEPARTMENT OF JUSTICE
Commercial Litigation Branch
1100 L Street, N.W.
Washington, D.C. 20530

Anthony J. LaRocca, Esq.
STEPTOE & JOHNSON LLP
1330 Connecticut Ave., N.W.
Washington, D.C. 20036-1795

Yoshihiro Saito, Esq.
PERKINS COIE LLP
607 Fourteenth Street, N.W.
Washington, D.C. 20005-2011

Charles O Verrill, Jr., Esq.
WILEY, REIN & FIELDING
1776 K Street, N.W.
Washington, D.C. 20006

SECOND REMAND DETERMINATION:

Mitsubishi Heavy Industries, Ltd. v. United States,

Court No. 96-10-02292

This Second Remand Determination involves the antidumping duty determination of the International Trade Administration ("ITA"), U.S. Department of Commerce, in Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, ("LNPP") from Japan.(1) In Slip Op. 99-46 (May 26, 1999), ITA was ordered either to explain how the Japanese and U.S. LNPP are reasonably comparable notwithstanding the agency's 20 percent "difference in merchandise" ("difmer") guideline or find that no foreign like product exists.

A draft Second Remand Determination was provided to the parties on August 5, 1999. On August 11, 1999, respondents Mitsubishi Heavy Industries, Ltd. (MHI) and Tokyo Kikai Seisakusho, Ltd. (TKS) submitted comments on the draft determination (hereinafter "MHI Comments" and "TKS Comments," respectively).

For the reasons set forth below, ITA concludes that LNPP sold in Japan satisfy the foreign like product definition, notwithstanding the agency's determination that price-to-price comparisons between sales of Japanese and U.S. LNPP were not appropriate. First, ITA notes that it did not conduct a "difmer" analysis when it declined to compare Japanese LNPP and U.S. LNPP sales. In any event, the 1992 "difmer" policy bulletin -- drafted when 19 U.S.C. 1677(16) referred to "such or similar merchandise" rather than "foreign like product" - reveals an emphasis on model-matching criteria which is not required when applying the "reasonably comparable" prong of the "foreign like product" definition to other provisions of the statute, including the calculation of CV profit. In our view, the Act may reasonably be interpreted to permit the phrase "may reasonably be compared" to have meaning consistent with the specific context in which it is applied. Finally, for purposes of calculating CV profit, we determine that TKS's home market LNPP may reasonably be compared to its sales of LNPP in the United States based on evidence that LNPP in both markets share detailed product characteristics, even if the custom-made combination of precise specifications makes price-to-price comparisons impracticable. In our view, Congress could not have intended that the CV profit calculation be driven by model-matching considerations, because such an interpretation would sharply curtail the applicability of the preferred method for calculating CV profit provided in 19 U.S.C. 1677b(e)(2)(A).

As more fully explained below, ITA believes that this interpretation of the statute is permissible; on the other hand, if the Court determines that TKS's proposal is the only permissible interpretation, we would be required to base CV profit on something other than home market sales of LNPP. As we explain in the Interested Party Comments section below, the consequence of TKS's proposal is that it would allow the inclusion of below-cost sales in the profit calculation simply because the complex nature of the subject merchandise did not permit price-to-price comparisons.

In the December 21, 1998, Remand Determination ("First Redetermination"), ITA began its discussion of this issue by providing background on the purpose of the foreign like product definition in section 771(16)(A)-(C) of the Tariff Act of 1930, as amended ("the Act"), 19 U.S.C. 1677(16(A)-(C), noting that it allows ITA to distinguish between merchandise sold in the home market which is identical, similar or reasonably comparable for purposes of model matching. First Redetermination at 15. ITA further noted that it typically does not make price-to-price comparisons where the variable cost of manufacturing of the foreign like product differs from the variable cost of manufacturing of subject merchandise sold to the United States by greater than 20 percent of the cost of manufacture of the U.S. merchandise. See IA Policy Bulletin 92.2.(2)

In response to the Court's request that it explain the statutory definition relied upon when classifying LNPP sold in the home market as the "foreign like product," ITA stated that it relied upon 19 U.S.C. 1677(16)(C) because [f]irst, the LNPP produced and sold in Japan by TKS were: 1) produced in the same country as the merchandise subject to the investigation (Japan); 2) produced by the same person (TKS); and 3) are of the same general class or kind as the merchandise subject to the investigation (LNPP). Second, the LNPP sold in the home market were like the subject merchandise (LNPP) sold in the United States in the purpose for which they were used; i.e., both LNPP were used to produce newspapers. Finally, as described above, home market LNPP may reasonably be compared to the subject merchandise (LNPP).

First Redetermination at 17. ITA went on to conclude that "[t]he fact that it was not practicable to compare specific models of LNPP is not the same as saying that home market LNPP may not reasonably be compared with the subject merchandise (LNPP)." Id.

In Slip Op. 99-46 at 29, the Court stated that

[b]ecause Commerce appears to find that the difmer adjustment would exceed the 20 percent guideline, Commerce cannot conclude that the home market and U.S. LNPPs "may reasonably be compared" under 19 U.S.C. 1677(16)(C)(iii) without explaining how the merchandise nevertheless remains comparable.

In ITA's view, this statement likely stemmed from a lack of clarity on ITA's part in its First Redetermination. ITA's reference to its "difmer" practice was by way of background and was not intended to suggest that ITA made a determination in this case that the difmer adjustment would exceed the 20 percent guideline. In fact, ITA did not conduct a "difmer" analysis in this case; instead, after reviewing some of the different specifications between a sample of home market and U.S. LNPP sales made by the Japanese respondents, it concluded that

[t]he sheer extent of the physical differences demonstrate that the [petitioner's] proposed matches are between products separated by complex physical differences so numerous that [ITA's] normal reliance on [difmer] adjustments would become an analytical exercise equivalent to the use of constructed value.

Nov. 9, 1995, Normal Value Memorandum, C.R. 73, at 16-17.

Thus, ITA determined that it would not be practicable to conduct such an exercise. Pursuant to 19 U.S.C. 1677b(a)(1), ITA determined that while home market sales of the foreign like product were "viable," the "particular market situation" in the exporting country did not permit a proper comparison. As ITA explained, the particular market situation was characterized by (1) a unique demand pattern prevalent in each national market; (2) unique technical specification required for each highly customized LNPP sold; and (3) very low volume of individual LNPP sales in the normal business cycle. Normal Value Memorandum at 3.

As a result, ITA resorted to CV as it has in other proceedings involving large custom-built capital equipment. See, e.g., Mechanical Transfer Presses (MTPs) from Japan: Preliminary Results and Termination in Part of Antidumping Administrative Review, 61 Fed. Reg. 15034, 15035 (1996), citing Large Power Transformers from France: Final Results of Antidumping Administrative Review, 60 Fed. Reg. 62808 (1995) and MTPs from Japan: Final Results of Antidumping Administrative Review, 58 Fed. Reg. 68117 (1993).

Notwithstanding ITA' s decision not to conduct price-to-price comparisons between LNPP sold in Japan and LNPP sold in the United States, ITA reasonably concluded that home market LNPP was the "foreign like product" upon which CV profit must be based.

The "foreign like product" definition of the Act is relevant to a variety of analyses under the antidumping law. As explained above, the definition serves to distinguish between merchandise sold in the home market which is identical, similar or reasonably comparable for purposes of model matching. However, the foreign like product definition is also tied in to other analyses in the statute which make it clear that Congress could not have intended that interpretation of the definition be driven by product matching considerations.

For example, as ITA has previously noted, ITA conducts the "viability" test on the home market sales of the foreign like product, pursuant to 19 U.S.C. 1677b(a). Requiring that those home market sales satisfy product matching criteria would require that parties submit product matching data before the agency could determine the appropriate comparison market.(3)

The foreign like product definition is relevant also to the calculation of profit under the constructed value (CV) provision. The preferred method for measuring profit is to add to CV

the actual amounts incurred and realized by the specific exporter or producer being examined in the investigation or review for selling, general, and administrative expenses, and for profits, in connection with the production and sale of a foreign like product, in the ordinary course of trade, for consumption in the foreign country . . .

19 U.S.C. 1677b(e)(2)(A) (emphasis added). See Floral Trade Council v. United States, 41 F. Supp.2d 319, 326 (1999).

For each of these determinations, 19 U.S.C. 1677(16) establishes a descending hierarchy, articulating preferences for the type of foreign like product upon which ITA's "determination . . . can be satisfactorily made." Where, as here, the subject merchandise is complex, ITA's selection of a particular category will depend upon the particular circumstances of the case. The term "foreign like product" is not limited to the product which is identical in physical characteristics to the subject merchandise (19 U.S.C. 1677(16)(A)) or even to the product that is similar to the subject merchandise (19 U.S.C. 1677(16)(B)). If either the identical or the similar merchandise is not available, merchandise of the "same general class or kind" as the subject merchandise will qualify as the "foreign like product" (19 U.S.C. 1677(16)(C)).

With regard to CV profit, an overly-restrictive reading of the "reasonably comparable" prong of the foreign like product definition would sharply curtail the applicability of the "preferred" method for calculating CV profit provided in 19 U.S.C. 1677b(e)(2)(A). For example, Congress could not have intended that ITA limit the profit calculation under 19 U.S.C. 1677b(e)(2)(A) to profit incurred in the production or sale of merchandise identical or similar to the subject merchandise because, in that event, the "preferred" method provided in 19 U.S.C. 1677b(e)(2)(A) would rarely, if ever, be applied in proceedings involving custom-built machinery.(4)

It is an essential principle of statutory construction that statutory provisions should be read in harmony, "leaving no provision inoperative or superfluous or redundant or contradictory." Holley v. United States, 124 F.3d 1462, 1468 (Fed. Cir. 1997) (citing Moskal v. United States, 498 U.S. 103, 109-110 (1990). Therefore, it is reasonable for ITA to calculate CV profit based on home market sales of the foreign like product, notwithstanding the finding that those sales could not serve as the basis of price-to-price comparisons.

In the same manner, because the home market sales of LNPP reflected the actual amounts for profit realized by the Japanese respondents, ITA properly applied the preferred method, as mandated by section 1677b(e)(2)(A). To apply an alternative methodology, as TKS proposes, in situations such as this, simply because it was not practicable to conduct price-to-price comparisons with the home market merchandise, would virtually eliminate the statutory preference to calculate profit based upon section 1677b(e)(2)(A) in cases where custom-built capital equipment is involved.(5)

In other proceedings involving complex custom-built capital equipment, ITA has declined to compare home market and U.S. sales of subject merchandise, resorted to CV, and then calculated CV profit based on the sales of the home market merchandise. For example, in the 1994-95 administrative review of the antidumping order on mechanical transfer presses from Japan, ITA preliminarily determined that

[w]hile the home market is viable, the particular market situation in this case, which requires that the subject merchandise be built to each customer's specifications, does not permit proper price-to-price comparisons in either the home markets or third countries.

MTPs from Japan: Preliminary Results and Termination in Part of Antidumping Administrative Review, 61 Fed. Reg. 15034, 15035 (1996). In commenting on the determination, petitioner argued that CV profit for respondent Kurimoto should be based on the second alternative method for calculating amounts for profit in those instances in which a respondent's sales of the foreign like product cannot be used. MTPs from Japan: Final Results of Antidumping Administrative Review, 61 Fed. Reg. 52910, 56910-11 (1996). Specifically, petitioner argued that CV profit for Kurimoto should be based on the weighted-average profit realized by respondent Aida, the other investigated company with sales of the foreign like product. Id. ITA rejected petitioner's argument, concluding that it was appropriate to use Kurimoto's profit on sales of the foreign like product, notwithstanding the finding that those sales could not serve as the basis of price-to-price comparisons. Id.(6)

Similarly, in this case, TKS's sales of LNPP in the home market, at a minimum, constitute sales of "the same general class or kind" as the LNPP under investigation.(7) Further, TKS's home market LNPP were like the subject merchandise in the purpose for which they were used; i.e., both LNPP were used to produce newspapers. Finally, TKS's home market LNPP may reasonably be compared to its sales of LNPP in the United States given that Congress could not have intended that such comparison be driven by product matching considerations, an interpretation that would sharply curtail the applicability of the preferred method for calculating CV profit provided in 19 U.S.C. 1677b(e)(2)(A). Accordingly, it was appropriate for ITA to use the profit on sales of the foreign like product in the home market as it did in MTPs from Japan.(8)

TKS argues that ITA's Second Remand Determination is not responsive to the Court's instructions because the agency neither explained how Japanese LNPP and U.S. LNPP are reasonably comparable nor identified substantial evidence in support of its conclusion. TKS Comments at 6. According to TKS, ITA has essentially eliminated the "reasonably comparable" requirement from 19 U.S.C. 1677 (16)(C), reducing the definition of foreign like product to "all merchandise subject to an antidumping proceeding." Id. at 9. TKS rejects as unfounded ITA's concern that an overly restrictive reading of the foreign like product definition would limit the applicability of the "preferred" method of calculating CV profit. Id. at 11. In TKS's view, ITA's rationale would read out of the statute the alternative methodologies for calculating CV profit. Id. at 13. Finally, TKS argues that ITA's reference to the MTPs case -- where merchandise was found not to be reasonably comparable pursuant to 19 U.S.C. 1677 (16)(C) -- demonstrates that the agency made a finding that Japanese LNPP and U.S. LNPP are not reasonably comparable. Id. at 15-16.

In its comments, MHI adopts TKS's position for the first time in this litigation. According to MHI, the Second Remand Determination fails to carry out the Court's instructions that ITA explain the basis for its conclusion that home market LNPPs are reasonably comparable to the subject merchandise. MHI Comments at 3.

ITA's Position: We disagree with TKS and MHI. As explained above, ITA believes its interpretation of the "reasonably comparable" prong of the foreign like product definition is reasonable and its explanation of that interpretation is responsive to the Court's instructions.

ITA's conclusion is supported by the common use -- to produce newspapers -- to which both home market and U.S. LNPP are employed. In addition, evidence submitted throughout the course of the underlying proceeding by both TKS and MHI supports ITA's position. In its questionnaire, ITA requested that both respondents identify LNPP sold in both Japan and the United States using the same detailed set of press characteristics. See ITA August 28, 1995, Section A Questionnaire, P.R. 72, at A-4 - A-6, reprinted as Attachment 1 to this redetermination. In their responses, both MHI and TKS indicated that the LNPP sold in Japan and the LNPP sold in the United States share the detailed press characteristics that ITA set out in its questionnaire. For example, in MHI's October 17, 1995 Section A Response, P.R. 176, at exhibits 11-12, the U.S. sale of a LNPP press system to the Washington Post was identified using the same press characteristics as the home market LNPP sale of a press system to Nikkei Ibaragi High Speed Offset. See Attachment 2. Similarly, TKS's descriptions of its home market and U.S. sales of LNPP employed comparable press characteristics, though it provided less detail than MHI and no public summaries. See TKS October 17, 1995 Section A Response, C.R. 38, at Exhibits A-3 - A-5.(9) While the sheer number of characteristics -- and the fact that each completed custom-made LNPP model reflected a different mix of these common characteristics -- led to ITA's determination that price-to-price comparisons were not practicable, the fact that both respondents' LNPP (whether sold in Japan or the United States) shared these detailed characteristics constitutes substantial evidence that home market LNPP could reasonably serve as the basis for CV profit.

We also disagree with TKS that ITA's interpretation has eliminated the "reasonably comparable" requirement from 19 U.S.C. 1677(16)(C). TKS Comments at 9. As explained above, ITA's interprets the "reasonably comparable" phrase within the context of the statutory provision to which it is being applied. While it makes sense for the "reasonably comparable" interpretation to employ model-matching criteria when the agency conducts price-to-price comparisons, it certainly does not make sense when the agency conducts the viability test or calculates CV profit. Given that Congress has not defined the circumstances in which merchandise may be "reasonably compared," we believe an interpretation that takes account of the statutory context is not only permissible but is the most reasonable course for avoiding nonsensical results.

TKS's argument, however, does lead to such nonsensical results. While it purports to recognize "that there may be several instances where custom-made machinery does, in fact, satisfy the foreign like product criteria listed in 19 U.S.C. 1677(16)(C)," TKS's posture before the agency makes it hard to imagine any instance involving custom-made machinery in which this would be true. Congress could not have intended that the "preferred" method for calculating CV profit provided in 19 U.S.C. 1677b(e)(2)(A) would rarely, if ever, be applied in proceedings involving custom-built machinery. In fact, according to the SAA, the preferred method for calculating CV profit must apply unless "there are no home market sales of the foreign like product or because all such sales are at below-cost prices." SAA at 840. TKS seeks to avoid this statutory preference by invoking price comparability distinctions that have no bearing on the CV profit calculation.

Furthermore, even as it states that ITA's interpretation "would read out of the statute the alternative methodologies for calculating [CV] profit," TKS Comments at 13, TKS's own proposal seeks to apply an alternative methodology in a manner contrary to the Act. In seeking application of the alternative methodology set out in section 1677b(e)(2)(B)(i), TKS candidly seeks a CV profit calculation that includes its profitless home market sales made at below the cost of production.(10) According to TKS, this alternative methodology -- under which CV profit calculations are based on the "same general category of merchandise as the subject merchandise" -- is the appropriate statutory provision to apply because "TKS's home market LNPPs belonged to the above-mentioned category of merchandise, being the 'same class or kind of merchandise as the subject merchandise.'" TKS August 4, 1997 Reply Brief at 6. But TKS's argument is based on the erroneous assumption that the statutory term "general category of products," which is the basis for the profit calculation under section 1677b(e)(2)(B)(i), is synonymous with the "class or kind of merchandise." There is no statutory requirement that, for purposes of section 1677b(e)(2)(B)(i), the "general category of products" must correspond to the "same class or kind of merchandise." According to the SAA, H. Doc. 316 at 840, the alternative profit calculation provided in section 1677b(e)(2)(B)(i) "is consistent with the existing practice of relying on a producer's sales of products in the same 'general class or kind of merchandise'" (emphasis added), (i.e., a category that is broader than the class or kind of merchandise).(11) In its past practice, ITA has reasonably interpreted the term "general category of products" to "encompass a group of products that is broader than the subject merchandise." (12) As a result, the same "general category of products" as the subject merchandise (LNPP) would presumably be some category of products broader than LNPP.

Finally, there is little significance to TKS's claim that ITA's reference to the MTPs case -- where merchandise was found not to be reasonably comparable pursuant to 19 U.S.C. 1677 (16)(C) -- demonstrates that the agency made a finding that Japanese LNPP and U.S. LNPP are not reasonably comparable. Id. at 15-16. TKS references the pre-URAA investigation in which ITA resorted to CV given the custom-made nature of the merchandise. Of more significance is the fact that TKS makes no mention of the post-URAA segments of this proceeding, discussed on pages 8-9 above, in which ITA calculated profit based on home market sales even though those sales could not serve as the basis for price-to-price comparisons.

In sum, ITA's interpretation of the "reasonably comparable" prong of the foreign like product definition is supported by substantial evidence, is reasonable, and, consequently, is responsive to the Court's instructions. The LNPP sold in both the home market and the United States by TKS and MHI have a common use and share the same detailed set of press characteristics. ITA' interpretation is reasonable because a contrary reading would result in the preferred CV profit calculation under 19 U.S.C. 1677b(e)(2)(A) rarely, if ever, being applied in proceedings involving custom-built machinery. Finally, TKS's proposal that CV profit be calculated based on all home market sales of LNPP is based on a misreading of the alternative profit methodology provided in section 1677b(e)(2)(B)(i).

For the reasons explained above, ITA concludes that LNPP sold in Japan satisfies the foreign like product definition and may serve as the basis for the CV profit calculation.

______________________

Richard W. Moreland
Acting Assistant Secretary
    for Import Administration

Date: August 23, 1999


ATTACHMENT 1

ATTACHMENT 2

ATTACHMENT 3


Footnotes:

1. 61 Fed. Reg. 38,139 (1996), as amended by Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, from Japan, 61 Fed. Reg. 46,621 (1996).

2. Of course, the difmer guideline "is just that, a guideline and not an inflexible rule. There may be instances in which the comparisons may be reasonable even if the difmer is in excess of 20% of the cost of manufacture of the U.S. model." See IA Policy Bulletin 92.2.

3. Indeed, in a pre-URAA case, the Federal Circuit affirmed ITA's home market viability determination, which was based upon sales of all home market animal glues regardless of grade because they had "many common uses" and, thus, met the requirement of section 1677(16)(C) as merchandise that "may reasonably be compared." U.H.F.C. Co. v. United States, 916 F.2d 689, 697 (Fed. Cir. 1990). At the same time, the appellate court recognized that ITA had a policy, pursuant to which, once the home market was found to be a viable basis for foreign market value ("FMV," now "normal value" or "NV"), ITA would match the United States price of merchandise with the FMV of the merchandise that was "most similar" to obtain the most accurate dumping margin. Id.

4. ITA's interpretation of "foreign like product" is also reflected in its position that profit should be calculated on an aggregate, rather than model-specific, basis. As ITA reasoned in the preamble of its proposed regulations:

[S]ection 773(e)(2)(A) [1677b(e)(2)(A)] of the amended Act provides for use of the actual amounts incurred and realized for profit and SG&A "in connection with the production and sale of a foreign like product." The use of "a" arguably could be interpreted to mean a particular model. The SAA, on the other hand, refers to actual amounts incurred "in selling the particular merchandise in question (foreign like product)." SAA at 839. This language supports a view that the use of "a" was not intended to overturn our prior practice of relying on aggregate figures for profit and SG&A. Moreover, if "a" were to be interpreted literally, [ITA] would have the discretion to pick and choose the sale of the foreign like product from which profit and SG&A would be taken. This clearly would undermine the predictability of the statute. Given these distinctions, the amended Act arguably provides a narrower basis for the calculation of profit and SG&A than did the prior statute. Therefore, [ITA] intends to calculate profit . . . based on an average of the profits of foreign like products sold in the ordinary course of trade.

Antidumping Duties; Countervailing Duties; Proposed Rule, 61 Fed. Reg. 7308, 7335 (Feb. 27, 1996) ("Proposed Rules"). See, also, Antidumping Duties; Countervailing Duties; Final Rule, 62 Fed. Reg. 27296, 27358 (May 19, 1997) ("Final Rules").

5. As we explain in the Comment section below, application of the alternative profit methodology proposed by TKS would permit it to include below-cost sales in its profit calculation simply because the custom-made nature of the subject merchandise did not permit price-to-price comparisons.

6. Similarly, in the 1995 review of MTPs, ITA treated home market sales of MTPs as the foreign like product -- and relied upon profit incurred on those sales -- even though it was determined that the custom-built nature of the product did not permit price-to-price comparisons. See MTPs from Japan: Preliminary Results of Antidumping Administrative Review, 61 Fed. Reg. 57387, 57388 (1996); MTPs from Japan: Final Results of Antidumping Administrative Review, 62 Fed. Reg. 11820, 11822 (1997).

7. TKS, on the other hand, by invoking the alternative CV profit methodology in 19 U.S.C. 1677b(e)(2)(B)(i), takes the position that its home market LNPP is only in the "same general category of products."

8. During the underlying investigation, TKS cited MTPs with approval in acknowledging ITA's discretion to determine the appropriate basis for CV profit in cases involving custom-built capital equipment. In explaining why it initially calculated CV profit based on all sales by TKS of LNPP products in Japan during the POI, TKS stated:

As [ITA] has recognized in this investigation on many occasions, the subject merchandise under consideration are customized, high value capital goods. Sales of these LNPP products occur only sporadically and there may be only a limited number in any given year. Regarding TKS's sales of LNPP products in Japan during the POI, there are only a limited number of sales on which to base the profit calculation. . . . .

Given the limited number of sales of LNPP products, it is wholly appropriate for [ITA] to exercise its discretion in determining the appropriate basis for the "profit" element of the constructed value calculation, so as to assure that its analysis is truly representative of the industry under investigation rather than adopting an arbitrary and rigid rule that would exclude certain sales and produce aberrational and unrepresentative results. . . .[citing MTPs from Japan. . . .

TKS Section D Questionnaire Response, C.R. 91, Section D, Tab A, at 4.

9. TKS also provided Japanese- and English-language product brochures which demonstrate that it offered the "Spectrum" LNPP model for sale in both the United States and Japan. The brochures are identical in their description of product characteristics. See TKS September 28, 1995 Section A Response, P.R. 119, at Exhibits A-24, reprinted as Attachment 3.

10. As TKS has explained it, the alternative methodology set out in subparagraph (i) of section 773(e)(2)(B) should apply because:

(1) The home market price and cost data collected and analyzed by ITA related to the entire universe of TKS's home market LNPP sales, viz., "general category of merchandise"; (2) the methodology provided in subparagraph (ii) would have been unreliable in the context of the LNPP investigation, because the other Japanese respondent (MHI) also alleges in this Court that ITA improperly calculated its home market profit; and (3) ITA has not yet developed "any other reasonable method" for CV profit calculation, which is described in subparagraph (iii). If ITA had based its calculation of CV profit for the Japanese respondents on section 773(e)(2)(B)(i), instead of on section 773(e)(2)(A), it would have been unnecessary for ITA to exclude any below-cost home market sales as sales outside the ordinary course of trade. This is because Congress specifically stated that cost tests are not applicable to a "general category of merchandise". Under section 773(e)(2)(B), therefore, ITA could have avoided the strained application of a model-specific methodology for excluding below cost sales and, instead, have properly determined the amount of the home market profit consistent with the record evidence.

TKS's April 21, 1997, 56.2 Brief (Company-Specific Issues) at 30 (emphasis added)(citations omitted).

11. TKS's quotation of the SAA in support of its argument omits the word "general" that qualifies "class or kind of merchandise."

12. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy, Japan, Romania, Sweden, and the United Kingdom: Final Results of Antidumping Administrative Reviews, 64 Fed. Reg. 35590, 35611 (July 1, 1999)("AFBs")("general category of products" for AFBs would include non-subject merchandise such as tapered roller bearings); Certain Preserved Mushrooms from Chile; Final Determination of Sales at Less Than Fair Value, 63 Fed. Reg. 56613, 56622 (1998)( fruit and vegetable products are the same "general category of products" for preserved mushrooms). See, also, Final Rules, 62 Fed. Reg. At 27360.