CIT Upholds Surrogate Financial Statement Pick, Use of Invoice Date as Date of Sale

In the investigation, petitioner Edsal Manufacturing challenged Commerce's pick of Thai steel shelving maker PNS Manufacturing's surrogate financial statement, urging the agency to instead use the statements of Sahamitr Pressure Container, a Thai company making liquefied petroleum gas and other pressure containers. The agency rejected Sahamitr's statements on the grounds that the company doesn't make steel shelving and, instead, makes pressure containers.

Edsal said Commerce's conclusion that Sahamitr doesn't make comparable merchandise is "conclusory." Barnett rejected this claim, finding that the support for the agency's conclusion is "evident," since "PNS and Sahamitr make different products." The judge said the "product names alone explain that one is more like the subject merchandise than the other."

The agency can reasonably pick the financial statements of a company making "identical or nearly identical merchandise over those of a company producing non-identical merchandise, even if that non-identical merchandise, such as the LPG cylinders here, might be considered sufficiently comparable in another case with fewer alternatives," the court held.

The petitioner also challenged the rejection of Sahamitr's statements, which was partially premised on the company's receipt of countervailable subsidies, on the basis that the subsidies had a minimal impact on the statements and were improperly considered. Barnett said Commerce rejected Sahamitr's statements on the grounds that the company's products were less comparable to the subject merchandise than PNS's, "not simply because they contained evidence of receipt of countervailable subsidies."

Edsal also said Commerce erred in picking PNS, since its statements are less detailed and comprehensive than Sahamitr's statements. The petitioner cited a past AD proceeding in which the agency purportedly rejected statements, since they didn't provide a sufficient level of detail to "reasonably breakdown selling expenses between direct and indirect." Barnett said what the agency actually found in that case was that the statements gave "no level of detail to reasonably breakdown selling expenses between direct and indirect."

Here, however, "PNS’s financial statements included sufficient details about its expenses for Commerce’s purposes," the court found. "To the extent that Edsal suggests that Commerce did not adequately address this argument, given the weakness of the argument, any failure by Commerce to address it more specifically does not amount to error," Barnett added.

Edsal also challenged the date of sale of Siam Tech's U.S. sales, urging Commerce to use the sales contract date and not the invoice date. The agency rejected this position on the basis that the sales contract didn't establish the "destination of the shipment." At CIT, the petitioner argued that the destination wasn't a material term for purposes of establishing U.S. sales dates.

The judge disagreed, finding that Edsal failed to "grapple with" that it's "not just the destination that is unknown but the destination country." The agency reasonably said that, "because the agency is gathering information on U.S. sales, the destination is also material."

Lastly, Edsal challenged the use of Bangkok Sheet Metal's and Siam Metal's actual costs as recorded in their financial accounting systems to report their total cost of manufacturing. The petitioner said Commerce should have used each company's monthly inventory movement schedule, since those schedules "were reconciled to the normal books and records, unlike" the company's reported costs. The agency said the inventory schedules were "flawed" and that the reported costs reflected the actual cost of making the foreign like product as recorded in the companies' normal books and records.

For Bangkok Sheet Metal, Edsal said the respondent failed to explain why the costs in the inventory schedules differed "so significantly" from its reported total cost of manufacturing. Barnett said Bangkok Sheet Metal actually provided a "direct explanation" of the discrepancy, which made clear that the subject merchandise is mass produced, while other products are individually made and thus have higher per unit costs.

For Siam Metal, Edsal said Commerce didn't adequately address the claim that nothing on the record supports the finding that the "finished goods inventory values were recorded at purchase price.” The court said that not only did Commerce "specifically identify this argument," the agency "then cited to the evidence supporting its decision and explained that the 'per-unit amount recorded as the inventory value (after converting to [U.S. dollars]) ties to the per-unit sales price from an invoice.'"

Barnett then said Edsal is "left with nothing other than speculation" regarding its claim that the verification report isn't sufficient to support Commerce's finding. Nothing in the record "suggests any flaw in Commerce’s verification regarding the inventory schedule," the judge said.

(Edsal Manufacturing v. United States, Slip Op. 25-103, CIT # 24-00108, dated 08/12/25; Judge: Mark Barnett; Attorneys: Matthew Martin of Kelley Drye for plaintiff Edsal Manufacturing; An Hoang for defendant U.S. government; Alexandra Salzman of the Inter-Global Trade Law Group for defendant-intervenors Bangkok Sheet Metal Public Co. and Siam Metal Tech Co.)