BINATIONAL PANEL REVIEW PURSUANT TO THE
NORTH AMERICAN FREE TRADE AGREEMENT
ARTICLE 1904

During the course of the seventh administrative review, CEMEX and CDC challenged the underlying antidumping order on the ground of an alleged defect in the initiation of the original antidumping investigation. Specifically, the alleged defect goes to the question of whether the petition filed in the original investigation had the requisite regional industry support at the time it was filed. This argument was raised in the third through sixth administrative reviews and was rejected by Commerce in each one. In addition, the binational panels in the third and fifth administrative reviews also considered this argument and ruled against CEMEX and CDC in both instances. See Gray Portland Cement and Clinker from Mexico, USA-95-1904-02 (NAFTA September 13, 1996); Gray Portland Cement and Clinker from Mexico, USA-97-1904-02 (NAFTA June 18, 1999).

2. Contentions Of The Parties

In this Panel review, only CDC contends that Commerce should have terminated the review and revoked the underlying antidumping duty order on the ground that petitioner never demonstrated sufficient support for the petition. Pointing to the antidumping duty statute, CDC argues that Commerce may initiate an investigation only when a petition is filed on behalf of an industry. In the absence of the requisite industry support, CDC maintains, the petitioner lacks standing to request antidumping duty relief. See CDC's May 21, 2001, Rule 57(1) Brief, at 57-61.

Turning to the language of the Trade Agreement Act of 1979 (the antidumping duty law in effect at the time the original petition was filed in this case), CDC construes the language of the statute as requiring that a petitioner who files an antidumping duty petition on behalf of a regional industry must have the support of all or almost all of the producers in the region. CDC maintains that there was no showing at the time of the initiation of the investigation that the petition was filed on behalf of all or almost all of the cement producers in the region. On the contrary, CDC points out, the petition had the support of producers accounting for only 62 percent of regional production. Therefore, CDC concludes, Commerce lacked authority to initiate the investigation, to issue an antidumping duty order, as well as to conduct subsequent administrative reviews of that original order.

In its Final Determination in the seventh administrative review, Commerce once again determined that it was under no obligation to revisit the issue of whether a majority of the domestic industry or of the region supported the petition. Final Determination, 64 Fed. Reg. at 13149. Because petitioner�s standing to file the original petition was not challenged at the time of the original investigation or in judicial review proceedings following publication of the antidumping duty order, Commerce concluded that the issue is barred from further review. See Commerce's November 16, 2001, Rule 57(2) Brief, at 113-126. STCC echoes the views of Commerce in its response brief. See STCC's November 16, 2001, Rule 57(2) Brief, at 174-205.

3. Analysis

NAFTA Article 1904(3) provides in part that �[t]he panel shall apply . . . . the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority.� NAFTA Article 1911 defines the phrase �general legal principles� and provides a non-exhaustive list that includes principles of �standing, due process, rules of statutory construction, mootness and exhaustion of administrative remedies.� Other general legal principles not expressly mentioned but which are certainly embraced by the phrase �general legal principles,� at least in the case of the CIT, include waiver, limitations periods, and principles of claim and issue preclusion. See Slazengers, Inc. v. United States, 158 F. Supp. 726, 741 (Cust. Ct. 1957) (rules of waiver, estoppel, and res judicata applicable in proceedings involving the United States). Having considered the arguments and contentions of the parties, this Panel rejects CDC�s claim.

First, having failed to file a summons and complaint within the applicable period of limitations, CDC is time barred from bringing its claim based on insufficiency of the original petition. As 19 U.S.C. � 1516a(a)(2) plainly states, CDC had 30 days from the date of publication of the original antidumping duty order in which to file a summons with the CIT challenging Commerce�s decision to initiate the investigation in this antidumping duty proceeding. This step CDC failed to take. If a party fails to meet this limitations period, which is also jurisdictional, any claims arising out of an investigation are necessarily barred. See Mineaba Co. v. United States, 782 F. Supp. 117 (Ct. Int�l Trade 1992), aff�d, 984 F.2d 1178 (Fed. Cir. 1993).

Second, consideration of CDC�s claim in the instant panel review is foreclosed on the grounds of waiver, claim preclusion, and issue preclusion.⁸Characterizing the alleged defect with the petition and original investigation as �jurisdictional,� CDC places heavy reliance upon the CIT's decision in Gilmore Steel Corp. v. United States, 585 F. Supp. 670 (1984). The court in Gilmore held that Commerce was not prohibited from reconsidering its decision to initiate an investigation on the ground of inadequate industry support for the petition, even after the statutory 20-day window for initiating an investigation has closed. The court in Gilmore, however, did not hold that such agency power is without temporal limits. Nor did the court hold that the question can be revisited ad infinitum. Indeed, in the Gilmore case itself the issue of whether adequate support existed for the petition was raised during the course of the original investigation, not years later in the course of a subsequent administrative review or judicial review thereof.

To suggest, as CDC does here, that the right to raise alleged jurisdictional defects is without temporal boundaries borders on the frivolous. It is fundamental that unless a party raises legal objections to a proceeding in a timely manner, those objections are waived and/or barred under the doctrine of res judicata. See Stearn v. Dep�t of Navy, 280 F.3d 1376, 1379 (Fed. Cir. 2002) (because petitioners did not raise the issue at any point during the initial proceedings before the administrative law judge, nor in their petition for review of the resulting initial decision, res judicata thus was available to the Navy as a defense to all three enforcement actions); Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1344 (Fed. Cir. 2001) (it is a long-standing rule that, in order to be reviewable on appeal, a claim or issue must have been pressed or passed upon below); Finch v. Hughes Aircraft Co., 926 F.2d 1574 (Fed. Cir. 1991) (argument on appeal barred on grounds of waiver and res judicata; imposition of double costs for bringing frivolous appeal).

Jurisdictional objections are no different in this regard. Federal courts, which are courts of limited subject-matter jurisdiction, are precluded under principles of res judicata from revisiting the issue of their subject-matter jurisdiction in a subsequent collateral proceeding when in an earlier proceeding a party either raised the jurisdictional issue or appeared in the original proceedings but failed to raise it. See Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371 (1940) (when a federal court proceeds to final judgment on the merits, the issue of its subject matter jurisdiction is res judicata even though it was not litigated); Hodge v. Hodge, 621 F.2d 590, 592 (3d Cir. 1980) (the interests of finality demand that �even the issue of subject matter jurisdiction must at some point be laid to rest�); Slazengers, Inc. v. United States, 158 F. Supp. at 741 (challenge to court�s subject matter jurisdiction waived by a failure to make timely and specific objection to the supposed lack thereof).

In short, having failed to raise the issue of the adequacy of support for the petition either in the course of the original investigation or in judicial review proceedings of that investigation, CDC�s claim is foreclosed on the grounds of waiver, claim preclusion, and issue preclusion.

Third and finally, this Panel addresses CDC�s claim as if it were being raised for the first time. As noted above, CDC has pressed this claim before two other binational panels. The panel in the third administrative review heard CDC�s standing claim and rejected it on three grounds: (1) the claim was barred by the applicable statute of limitations, (2) the claim was barred by res judicata, and (3) the panel lacked the authority under NAFTA Article 1906 to review or alter Commerce�s decision to initiate the investigation because that decision predated the effective date of NAFTA. See Gray Portland Cement and Clinker from Mexico, USA-95-1904-02 (NAFTA Sept. 13, 1996). Similarly, the panel in the fifth administrative review heard CDC�s standing claim and rejected it on the same three grounds, adding the fourth ground of failure to exhaust administrative remedies. See Gray Portland Cement and Clinker from Mexico, USA-97-1904-02 (NAFTA June 18, 1999).

In the interests of judicial economy, this Panel sees no reason to revisit the prior panels� grounds for rejecting CDC�s claim or the panels� well-reasoned opinions in support of those grounds. Accordingly, for this aspect of its opinion, this Panel adopts the views of the third and fifth review Panels� on this claim.⁹ See Gray Portland Cement and Clinker from Mexico, USA-95-1904-02 (NAFTA September 13, 1996); Gray Portland Cement and Clinker from Mexico, USA-97-1904-02 (NAFTA June 18, 1999).

The question of whether Commerce properly initiated the original investigation in this matter is barred by the applicable statute of limitations, res judicata, NAFTA Article 1906, and failure to exhaust administrative remedies. Therefore, we find that Commerce properly determined to refuse to revoke the antidumping duty order based upon alleged defects in the initiation of the original LTFV investigation. Accordingly, Commerce's determination is affirmed.

G. Whether (a) Commerce's Classification of CEMEX's Bag and Bulk Cement As The Same Like Product and (b) Commerce's Decisions That Sales Of CEMEX's Bag And Bulk Cement Were At The Same Level Of Trade Is Supported By Substantial Evidence.

During the seventh review period, all of CEMEX�s U.S. sales were of Type V cement in bulk form, while its sales in the home market included Type V cement in bulk, Type II cement in bulk, and Type I cement in both bag and bulk. CDC�s sales were entirely Type II cement, both in bulk and in bags. STCC's May 21, 2001, Rule 57(1) Brief, at 92. Because Commerce determined that all of CEMEX�s home market sales of Type V cement and Type II cement were made outside of the ordinary course of trade, it defined the foreign like product as similar merchandise. Gray Portland Cement and Clinker From Mexico, 66 Fed. Reg. 13148, at 13156. Therefore, as in other reviews of this case, Commerce determined that Type I cement sold in the home market was the most similar merchandise to CEMEX�s U.S. sales of Type V cement and to CDC�s U.S. sales of Type II cement. Id. Also, Commerce found that bag and bulk forms of Type I cement were physically identical merchandise, and therefore Commerce included all of CEMEX�s and CDC�s home market sales of Type I cement in its calculation of normal value regardless of packaging form. Commerce�s reasoning for this treatment was that form of presentation (packaging) is not a criterion to be considered when identifying the foreign like product pursuant to 19 U.S.C. � 1677(16). Commerce did make an adjustment to normal value to account for differences in packing costs between the comparison market and U.S. sales.

This form of analysis came into question in the fifth NAFTA panel review in which the panel concluded that a strict reading of 19 U.S.C. � 1677(16) requires that Commerce compare U.S. sales to the identical foreign like product as a first priority, if that product is available for comparison. The panel concluded that although both bulk and bagged cement are the identical �product� they are not the identical �merchandise� because the type of customers, pricing, and the uses for bulk cement are different than for bagged cement. The panel then overturned the decision of Commerce to use as the comparison product, a combination of bag and bulk sales and required Commerce to compare U.S. bagged sales to home market bagged sales and U.S. bulk sales to home market bulk sales. Gray Portland Cement and Clinker From Mexico, USA-97-1904-01 at 103-104 (NAFTA June 18, 1999).

The fifth panel review is now under an extraordinary challenge review under NAFTA Chapter 19 Annex 1904.13 and therefore was not binding on Commerce in the seventh review. There still resides the conflict that Commerce�s methodology poses. In the meantime Commerce is wrestling with this question and has asked this Panel to remand this issue for further analysis and resolution by Commerce.

CEMEX and CDC contend that there is a consistent pattern of differences in the price of cement sold in bulk and bags and that information contained in the record establishes that the difference in the price of cement packed in bags or sold in bulk confirmed that such sales were made at a different level of trade. See generally CEMEX's May 21, 2001, Rule 57(1) Brief, at 50-58.

In the original investigation in this case, CEMEX�s U.S. sales consisted of both bagged and bulk cement. In that investigation Commerce compared sales of bagged cement in the U.S. to home market sales of bagged cement and U.S. sales of bulk cement to home market sales of bulk cement. Gray Portland Cement and Clinker From Mexico, 55 Fed. Reg. 29244, at 29245 (July 18, 1990). This pattern or methodology continued until the fifth review, in which Commerce suddenly changed its prior administrative practice and required CEMEX to report both sales of bulk and bagged Type I cement and calculated normal value on the basis of both bagged and bulk sales. In the fifth NAFTA panel review the panel rejected this methodology as contrary to 19 U.S.C. � 1677(16).

The NAFTA panel remanded the case to Commerce with instructions that Commerce recalculate normal value using only sales of the most similar product, which is Type I sold in bulk. On February 17, 2000, the NAFTA panel affirmed the Commerce�s remand calculation of normal value based solely on the Type I cement sold in bulk. On March 23, 2000, the U.S. Government filed a request for an extraordinary challenge committee to overturn the panel determination. See Secretariat File No. ECC-2000-1904-01 U.S.A.

CEMEX contends that bagged cement does not satisfy the statutory definition of similar merchandise. In the Final Determination of the seventh review Commerce stated that the only difference between cement sold in bag and in bulk was the packaging. This was the same argument that was rejected by the NAFTA panel in the fifth review. Consistent with the goal of making fair price comparisons, 19 U.S.C. � 1677(16) sets forth a three step hierarchy for determining which products are to be used for a fair price comparison. These are A) identical merchandise, B) similar merchandise, and C) reasonably comparable merchandise. Commerce used the similar merchandise criteria but failed to satisfy the three prongs of the subsection B test (19 U.S.C. � 1677(16)(B)(i)-(iii)). Under this test, similar merchandise is defined as merchandise which is:

(i) produced in the same country and by the same person as the subject merchandise,

(ii) like that merchandise in component material or materials and in the purposes for which used, and

(iii) approximately equal in commercial value to that merchandise.

CEMEX also contends Commerce did not address the question as to whether the �packaging� was an inherent and functional part of the product. Simply labeling the bags as packaging without analysis is not enough. Merely discounting the cost of the bag does not account for the difference in commercial value between bulk and bagged cement. The products have different commercial values because they are different products and are used by different types of customers.

Finally, CEMEX argues that Commerce failed to determine if bag and bulk cement are approximately equal in commercial value. There are different handling measures for bag and bulk, different sales volumes, different uses, different pricing structures that are not solely due to the price of packaging, and different types of customers.

STCC contends that Commerce was correct in its analysis in accordance with their practice in prior reviews. See generally STCC's November 19, 2001, Rule 57(2) Brief, at 92-142. Commerce found that bulk and bagged cement were physically identical merchandise, and therefore included all of CEMEX�s and CDC�s sales of Type I cement. Commerce has consistently determined that it is appropriate to include all bulk and bagged sales in the foreign like product because form of presentation (packaging) is not a criterion to be considered when identifying the foreign like product pursuant to 19 U.S.C. � 1677(16). Additionally, the fifth review panel decision, on which both CEMEX and CDC rely heavily, is not binding, not precedent, and is not even persuasive authority.

Furthermore, STCC also contends that 19 U.S.C. � 1677(16) does not mention packaging as a criterion to be considered in defining foreign like product. Packaging is mentioned in 19 U.S.C. � 1677b(a)(6)(A) & (B) which requires Commerce to make an adjustment to normal value for the cost of packaging. Given the substance of this section, it must be contemplated that there might be comparisons of merchandise where the packaging is different and the only remedy is to deduct the cost of the packaging.

STCC further argues that Commerce has repeatedly determined that packaging is simply a form of presentation of merchandise and not a component material of the product. Therefore this fact is irrelevant to selecting the foreign like product. See, e.g., Gray Portland Cement and Clinker from Japan, 60 Fed. Reg. at 43763; Fresh Cut Roses from Ecuador, 60 Fed. Reg. 7019, 1022 (February 6, 1995); Red Raspberries from Canada, 50 Fed. Reg. 19768, 19771 (May 10, 1985). Commerce bases its analysis of whether products are �approximately equal in commercial value� on variable costs of production.¹⁰ As CEMEX and CDC do not claim a difference in variable cost between bulk and bagged cement, the commercial value of both forms of presentation must be equally similar to that of the merchandise sold in the United States.

Consequently, STCC continues, there is no basis for excluding a portion of the foreign like product from the normal value calculation based on packaging. Given that Type I cement otherwise satisfies the criteria specified in 19 U.S.C. � 1677(16), Commerce properly determined that all home market sales of Type I cement should be included in the foreign like product, and thus in the normal value calculation.

STCC admits that Commerce did use bag-to-bag and bulk-to-bulk comparisons in the original investigation which CEMEX and CDC actually opposed stating that �[t]here is no basis in the statute or the regulations for comparing only packed product to packed product, and bulk to bulk product...�

Commerce reached no conclusions about bag to bag and bulk to bulk sales in the second, third and fourth reviews. Commerce did not ask for data on bagged sales in the second review because Type I cement, bulk or bagged, was not going to be used for matching purposes. In the third and fourth reviews, Commerce did ask CEMEX and CDC for information on sales of bagged and bulk Type I cement. However, that information on bagged sales was not provided by CEMEX or CDC and therefore the margin of dumping was based on facts available. See Gray Portland Cement and Clinker from Mexico, 60 Fed. Reg. 26865, 26867 (May 19, 1995) (third review); Gray Portland Cement and Clinker from Mexico, 62 Fed. Reg. 17581, 17584 (April 10, 1997) (fourth review).

In the fifth, sixth, and seventh reviews, Commerce determined that CEMEX�s home market sales of Type II and Type V cement were outside the ordinary course of trade. In these three reviews, Commerce calculated normal value on the basis of sales of similar merchandise, namely Type I cement. Commerce found consistently in these reviews that bulk and bagged sales of Type I are the same merchandise. Gray Portland Cement and Clinker from Mexico, 62 Fed. Reg. 17165 (April 9, 1997) (fifth review) and Gray Portland Cement and Clinker from Mexico, 63 Fed Reg. at 12777 (March 16, 1998) (sixth review). This same reasoning was followed in Gray Portland Cement and Clinker from Japan, 60 Fed. Reg. 43761, 43763 (August 23, 1995). STCC also points out that the NAFTA panel decision in the fifth review is flawed because the NAFTA panel violated the applicable standard of review by undertaking a de novo review of the matching issue and failing to remand to Commerce for further consideration. The standard of review applicable in these cases is whether Commerce�s decision is �unsupported by substantial evidence on the record, or otherwise not in accordance with law�. 19 U.S.C. � 1516a(b)(1)(B)(i). STCC also argues that the panel improperly reviewed this issue de novo rather than review Commerce�s decision to determine whether Commerce�s decision was supported by substantial evidence on the record.

According to STCC, the panel in the fifth review did not rely on the arguments raised by CEMEX. Instead, the panel decision was based on several new interpretations of the statute that had not previously been argued by CEMEX. These interpretations are inconsistent with both the statute and Commerce�s practice. Further, the panel�s decision to adopt the new and fallacious interpretations of 19 U.S.C. � 1677(16) completely blindsided Commerce and STCC who were deprived of any opportunity to rebut those interpretations. In reversing Commerce on this question, the panel violated the principal doctrine regarding review of administrative decisions set forth in Chevron U.S.A., Inc. v. National Resources Defense Council Inc., 467 U.S. 837 (1984) which bestows ample deference to administrative interpretations that are subject to judicial review and �...that considerable weight should be accorded to an executive Commerce�s construction of a statutory scheme it is entrusted to administer ....� Chevron, 467 U.S. at 844.

STCC also argues that the panel misinterpreted the requirement that comparison products be similar in the purposes for which they are used, pointing out that the panel confused types of buyers with purposes for which the product is used and they are not synonymous. It is inconsistent to characterize resale buyers or end users as a use. The term �use� can only refer to the application to which a product is put (for example in the case of cement, to make concrete), not to the stages in the chain of distribution through which the product passes before it is put to the intended application. See, e.g., Final Determination of Sales at Less Than Fair Value: Calcium Aluminate Cement, Cement Clinker and Flux from France, 14136, 14141 (March 25, 1994).

Another point that STCC makes is that the panel misinterpreted the requirement that comparison products be approximately equal in commercial value. Commerce is required to focus on differences in commercial value between home market merchandise and merchandise sold in the United States, not differences among products sold in the home market. See 19 U.S.C. � 1677(16)(B)(iii). The panel failed to make any findings with respect to the commercial value of the product sold in the United States and thus failed to comply with the statute.

The question for this Panel is whether the agency�s answer is based on a permissible construction of the statute.

The panel decision in the fifth review - which required Commerce to compare U.S. bagged sales to home market bagged sales and U.S. bulk sales to home market bulk sales -- provides some insight and understanding of this issue.

It is true, as STCC so forcefully advances, that the panel decision in the fifth review is not binding on this Panel; it is not precedent; and it is currently the subject of an extraordinary challenge proceeding. It is, however, a source of information and analysis stemming from an almost identical fact situation involving the same parties that we have here, and is useful in our own independent analysis of the issue.

This Panel, however, declines to get involved in a lengthy analysis of this issue in light of (a) Commerce�s request for a remand for further consideration and explanation of the classification of bulk and bag cement as the same foreign like product, see Commerce's November 16, 2001, Rule 57(2) Brief, at 126-27, and (b) the decision that CEMEX�s home market sales of bagged and bulk cement were made at one level of trade. Commerce explains that the Final Determination does not address relevant issues and facts CEMEX and CDC raised in the administrative proceeding, such as commercial value, and the alleged past administrative practice of Commerce to compare bagged to bagged sales and bulk to bulk sales. Id.; Gray Portland Cement and Clinker From Mexico, 66 Fed. Reg. at 13166.

Given the importance of the foregoing issues and the need to have a clear understanding of Commerce�s position in this matter, we hereby grant a remand without instructions so that this matter may be further considered and addressed by Commerce.
 

H. Whether Commerce's Treatment Of Warehousing Expenses As Indirect Selling Expenses Is Supported By Substantial Evidence

In its Final Determination, Commerce treated CEMEX's and CDC's U.S. warehousing expenses as indirect selling expenses, without addressing whether CEMEX's and CDC's U.S. warehousing expenses should, in fact, be treated as indirect selling expenses, or whether they should be treated as movement expenses. Commerce's November 16, 2001, Rule 57(2) Brief, at 127.

Commerce acknowledges that it did not address in the Final Determination whether CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses, or whether they should be treated as movement expenses. Commerce's November 16, 2001, Rule 57(2) Brief, at 127. Accordingly, Commerce, without confessing error, requests a remand so that it can consider and explain how CEMEX's and CDC's U.S. warehousing expenses should be treated. Id.

STCC agrees that the failure of Commerce to address whether CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses, or whether they should be treated as movement expenses, requires a remand. STCC's May 21, 2001, Rule 57(1) Brief, at 77. STCC points out that Commerce has "a statutory obligation to provide an explanation of 'the basis for its determination that addresses relevant arguments, made by interested parties who are parties to the . . . review.'" Id. (citing 19 U.S.C. � 1677f(i)(3)(A)). STCC also notes Commerce "must specifically reference in [its] determinations factors and arguments that are material and relevant, or must provide a discussion or explanation in the determination that renders evident the agency's treatment of a factor or argument," quoting SAA at 892.

In addition, STCC argues that Commerce's failure to treat CEMEX's and CDC's U.S. warehousing expenses as movement expenses was contrary to law and the evidence of record. Id. According to STCC, the antidumping statute, the SAA accompanying the URAA, and Commerce's regulations and practice all require Commerce to treat CEMEX's and CDC's U.S. warehousing expenses as movement expenses, as opposed to indirect selling expenses. Id. at 76. Therefore, STCC requests a remand with instructions for Commerce to treat CEMEX's and CDC's U.S. warehousing expenses as movement expenses. Id. at 80.

CEMEX claims that in accordance with 19 C.F.R. � 351.401(e)(2), Commerce properly treated its U.S. warehousing expenses as indirect selling expenses, as "the expenses were incurred at the [CEMEX] plant rather than a remote warehousing facility." See CEMEX's November 19, 2001, Rule 57(2) Brief, at 32. CEMEX also points out that in the sixth administrative review Commerce treated CEMEX's warehousing expenses as indirect selling expenses. Id. at 34. According to CEMEX, the administrative record in the seventh administrative review establishes that the factual situation remains unchanged from the sixth administrative review, and as such, Commerce should continue to treat CEMEX's warehousing expenses as indirect selling expenses. Id. at 34.

CEMEX further acknowledges that Commerce did not address in the Final Determination whether CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses, or whether they should be treated as movement expenses. Id. at 33. Hence, CEMEX argues for a limited remand with instructions for Commerce to confirm the reasoning of its continued classification of CEMEX's warehousing expenses as indirect selling expenses.

CDC claims that Commerce properly included its warehouse expenses in U.S. indirect selling expenses. CDC asserts that it demonstrated to Commerce in the seventh review that its U.S. warehousing expenses included a significant selling expense component and Commerce verified that these expenses were associated with making sales in the U.S. during the seventh review. CDC also notes that STCC made the same argument in the sixth review and it was rejected by Commerce. CDC's November 19, 2001, Rule 57(2) Brief, at 5-6. In addition, CDC claims that Commerce's decision to treat CDC's warehousing expenses as indirect selling expenses was consistent with Commerce's position in the sixth (as well as the fifth) administrative review. Id.

As to the treatment of CEMEX's and CDC's U.S. warehousing expenses, Commerce, without confessing error, requests a remand so that it can consider and explain how these expenses should be treated. When Commerce, without confessing error, wishes to reconsider its previous position, the reviewing body has discretion over whether to remand. See, e.g., SKF USA, Inc. v. United States, 254 F.3d 1022, 1029 (Fed. Cir. 2001). When Commerce's concern is substantial and legitimate, a remand is usually appropriate, while on the other hand, a remand may be refused if Commerce's request is frivolous or in bad faith. Id.

We hold that Commerce's request for a remand in this instance is, in fact, substantial and legitimate. As Commerce, STCC, and CEMEX all acknowledge, Commerce simply did not address in its Final Determination whether CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses, or whether they should be treated as movement expenses. Under this circumstance, Commerce's request for a remand to consider and explain how CEMEX's and CDC's U.S. warehousing expenses should be treated is substantial and legitimate. Accord Southwestern Bell Tel. Co. v. FCC, 10 F.3d 892, 896 (D.C. Cir. 1993) (noting that the court had previously allowed a remand to the FCC where the FCC sought voluntary remand "to give further consideration to the matters addressed in the [FCC's] orders"), cert. denied, 512 U.S. 1204 (1994); Wilkett v. ICC, 710 F.2d 861, 863 (D.C. Cir. 1983) (noting that the court had granted the Commission's motion for remand for purposes of reconsideration); see also Anchor Line Ltd. v. Federal Maritime Comm'n, 299 F.2d 124, 125 (D.C. Cir.) (noting that "when an agency seeks to reconsider its action, it should move the court to remand or to hold the case in abeyance pending reconsideration by the agency"). Therefore, we grant the request for a remand on this issue.

In remanding this case, in light of Commerce's expertise in administering the antidumping law, we decline to remand with instructions as requested by both STCC and CEMEX. See GMN Georg Muller Nurnberg AG v. United States, 763 F. Supp. 607, 611 (Ct. Int'l Trade 1991).

This Panel remands to Commerce, with no instructions, the issue of whether CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses, or whether they should be treated as movement expenses.
 

I. Whether Commerce's Treatment Of CEMEX's Home Market Pre-Sale Warehousing Expenses As Indirect Selling Expenses Is Supported By Substantial Evidence

In the Final Determination, Commerce refused to deduct CEMEX's home market pre-sale warehousing expenses from normal value. Final Determination, 64 Fed. Reg. at 13169. Commerce's refusal was based on Commerce's understanding, at the time, that "CEMEX did not, as in prior reviews, submit its data in accordance with the Department's instructions," and "[b]ecause there were no changes in CEMEX's reporting methodology from previous reviews, we again denied the adjustment." Id.

If these data were, in fact, submitted in accordance with Commerce's instructions, Commerce would have been required by U.S. antidumping law to deduct the home market pre-sale warehousing expenses from normal value. Specifically, 19 U.S.C. � 1677b(a)(6)(B)(ii) provides that normal value shall be --reduced by . . . the amount . . . attributable to any additional costs, charges, and expenses incident to bringing the foreign like product from the original place of shipment to the place of delivery to the purchaser . . . .

Therefore, if CEMEX submitted home market pre-sale warehousing expenses in accordance with Commerce's instructions, Commerce would have been required as a matter of law to deduct home market pre-sale warehousing expenses from normal value. 64 Fed. Reg. at 13168. This deduction would have reduced the normal value, and in turn, would have reduced CEMEX's dumping margin.

CEMEX argues that Commerce's determination that CEMEX did not submit its home market pre-sale warehousing expense data in accordance with Commerce's instructions was factually incorrect. CEMEX's May 21, 2001, Rule 57(1) Brief, at 68. CEMEX claims that its home market pre-sale warehousing expense data meet all of Commerce's criteria, and thus requests a remand so that Commerce can account for CEMEX's home market pre-sale warehousing expenses. Id. at 72.

Commerce states that it "has reviewed the record and determined that CEMEX had indeed submitted the data in the required manner and that CEMEX is entitled to the pre-sale warehousing adjustment." Commerce's November 16, 2001, Rule 57(2) Brief, at 128. Therefore, Commerce also requests a remand so that it can "make the appropriate pre-sale warehousing expense adjustment to CEMEX's normal value calculation." Id.

STCC claims that Commerce correctly refused to deduct CEMEX's home market pre-sale warehousing expenses from normal value. According to STCC, CEMEX reported home market pre-sale warehousing expense data "in exactly the same manner as it did in the sixth review," and that "CEMEX reported precisely the same information - for the same types of expenses and derived from the same accounting codes - that it did in the sixth review." STCC's December 14, 2001, Rule 57(3) Brief, at 31. Accordingly, STCC argues that this Panel should reject Commerce's request for a remand with respect to this issue.

In this situation, Commerce realizes that it made an error. Commerce, upon review of the record, has determined that CEMEX did, in fact, submit its home market

pre-sale warehousing expense data in the manner Commerce required, and thus, CEMEX is entitled to the pre-sale warehousing adjustment.

When an administrative agency makes an error, the Federal Circuit has held that "[r]emand to an agency is generally appropriate. . . absent the most unusual circumstances verging on bad faith." SKF USA Inc. v. United States, 254 F.3d 1022, 1029-30 (Fed. Cir. 2001). In this situation, we find that there are no unusual circumstances verging on bad faith that would result in this Panel not remanding the case. Therefore, this is a situation where remand is appropriate. Commerce, upon review of the record, has realized that CEMEX has submitted its pre-sale warehousing expense data in the required manner, and now intends to make the appropriate adjustment to CEMEX's normal value calculation. Considering Commerce "expertise in administering the antidumping law," GMN Georg Muller Nurnberg AG v. United States, 763 F. Supp. 607, 611 (Ct. Int'l Trade 1991), we will remand this issue to Commerce so that Commerce, pursuant to 19 U.S.C. � 1677b(a)(6)(B)(ii), can indeed make the appropriate adjustment to CEMEX's normal value calculation.

This Panel remands this issue to Commerce, with no instructions, so that Commerce can make the appropriate adjustment to CEMEX's normal value calculation, accounting for CEMEX's home market pre-sale warehousing expenses.

J. Whether Commerce's Decision To Classify Certain CDC Sales As Indirect Export-Price Sales Is Supported By Substantial Evidence

In the proceeding below, the petitioner contended that Commerce should deny CEMEX�s reported adjustment for home market freight expenses. Petitioner argued that such movement expenses are allowable only if they are reported based on the actual, transaction-specific expense or on an allocation methodology that is not distortive. It argued that CEMEX had failed to provide freight expense information on a transaction-specific basis, had failed to demonstrate why it could not do so and had provided allocation methodology that did not meet the requisite standard. 64 Fed. Reg. at 13167. CEMEX argued that Commerce deducted its home market freight expense from normal value properly because it reported the freight in the most specific manner permitted by its record-keeping system and that its methodology was not distortive. It also contended, contrary to petitioner�s position, that it presented adequate evidence that the expenses for freight provided by affiliated parties were made at arm�s length. Id. at 13167-68.

Commerce determined, based on its findings at verification, that CEMEX�s reported freight costs for Type I cement had been reported on as specific a basis as was feasible given CEMEX�s accounting system and that they provided a reasonable estimate of actual transaction-specific freight expenses. Commerce also determined that the expense for freight provided by CEMEX�s affiliated parties was at arm�s length. Commerce also rejected petitioner�s argument that CDC had failed to demonstrate entitlement to a freight expense adjustment for sales made by its affiliate Construcentero. Id. at 13168.

In the proceeding before this Panel, STCC urges that Commerce�s allowance of a deduction from normal value for CEMEX�s reporting of freight expenses for its home market sales was not supported by substantial evidence and was otherwise not in accordance with law. STCC points out that CEMEX did not report its freight expenses on a transaction-specific basis, as Commerce prefers, and instead averaged freight costs for each of its subsidiary operating companies. Nor did CEMEX report its freight expenses in a manner specific to the product type. Moreover, there was an �egregious discrepancy� between CEMEX�s reported shipment volume and the sales volume for Type II sales which Commerce did not address. STCC asks that the Panel remand to Commerce for a recalculation of normal value without deducting CEMEX�s claimed freight expenses. STCC's May 21, 2001 Rule 57(1) Brief, at 80-88; STCC's December 17, 2001 Rule 57(3) Brief, at 26-30.

Commerce notes that STCC was challenging its determination on this issue on the basis that an unresolved discrepancy in some of the volume data for Type II cement may have resulted in an inaccurate or distorted freight allocation. On the ground that it had not addressed this discrepancy/distortion argument in the Final Determination, Commerce asks that the freight issue be remanded to Commerce for further consideration and explanation. Commerce's November 16, 2001, Rule 57(2) Brief, at 130.

CEMEX argues that Commerce had made a correct deduction of home market freight expenses from the sales price. CEMEX asserts that it reported its freight expenses in the most specific manner permitted by its accounting records and that its allocation of actual costs to specific sales was done in accordance with Commerce�s usual methodology. CEMEX's November 19, 2001, Rule 57 (2) Brief, at 35-42.

As noted above, Commerce has asked the Panel to remand this issue to give Commerce the opportunity to consider aspects of the matter further and to explain the agency�s decision further. Where an agency�s concern in obtaining a remand of an issue, so that it may reconsider and explicate its position, is (1) substantial and legitimate, and (2) there are no indications that the remand request is frivolous or in bad faith, the remand should be granted. SKF USA Inc. v. United States , 254 F. 3d 1022, 1029 (Fed. Cir. 2001). We find that this standard has been met on the freight adjustment issue at hand and order the remand.

This Panel remands this issue to Commerce.
 

For the reasons discussed above, this Panel affirms Commerce with respect to the following four findings:

(1) That CEMEX's home market sales of cement that is physically Type V cement as Type II and Type V cement were outside the ordinary course of trade;

(2) That an adjustment to CDC's U.S. indirect selling expenses for interest allegedly incurred in financing cash deposits for antidumping duties was not warranted;

(3) That resort to partial adverse facts available for CEMEX's data from the Hidalgo plant (rather than total adverse facts available for CEMEX's entire response) was warranted; and

(4) That refusal to revoke the antidumping order based upon alleged defects in the initiation of the original LTFV investigation was warranted.

This Panel remands the following findings to Commerce for resolution within 90 days from the date of this Panel opinion:

(1) That CEMEX's home market sales of Type V cement sold as Type I cement were outside the ordinary course of trade;

(2) That duties should be assessed on a nationwide basis in this regional industry case;

(3) That CEMEX's bag and bulk cement should be classified as the same like product, and that sales of CEMEX's bag and bulk cement were at the same level of trade;

(4) That CEMEX's and CDC's U.S. warehousing expenses should be treated as indirect selling expenses;

(5) That CEMEX's home market pre-sale warehousing expenses should not be deducted from normal value;

(6) That certain CDC sales to unaffiliated U.S. customers by CDC's U.S. affiliate should be classified as indirect export price sales, rather than constructed export price sales;

(7) That a DIFMER adjustment to CEMEX's sales for the physical differences between Type I and Type V cement was warranted; and

(8) That an adjustment for CEMEX's freight expenses was warranted.

 

Notes: