The Department of Commerce has a policy of excluding value-annot taxes paid on inputs from constructive value when credited against taxes over the government or recovered by any other means. Here the Department applied this policy notwithstanding two decisions of this court interpreting the statute to require including such that in CV unless remitted over funded upon exportation. In this case the reported that on its face contained errors and it was not the full amount of that paid. Most critically we might fail to report that for electrodes consumed in particular months of the period of review. The Department neither corrected the facial errors in the reported that for electrodes nor determined the full amount of that paid. The record does not support the department's failure to either correct the errors or as it twice did before reversing itself or determine the full amount of that paid. Electroids are necessary to produce silicon metal
. Thus in each month that we may produce silicon metal it consumed electrodes. In the review we must state that it paid fat on the purchase of certain inputs not that it paid fat on some of its purchases of a given input. Fat would not be paid on particular electrodes only if they were imported and the import duties in associated fat were suspended or refunded under the Brazilian drawback system based on exportation of the finished product. There is no evidence in this case that we may use this system to avoid payment of fat on the electrodes consumed during the months in question. We may never, you know, importantly we may never claimed in its original response in the review a duty drawback adjustment which it had every right to do and every incentive to do had it imported electrodes under this system and thereby avoided payment of fat on those electrodes. In fact it flat out stated that there was quote there was no duty drawback during the ORN quote
. This was during this was in their questionnaire response in the review. Years later only after the department had twice corrected these errors in the draft results of the first and second remands only after the draft result of the second remand did REMA come forth with a brand new claim that the reason why fat wasn't reported for these electrodes was that they were important which is directly contrary to this evidence. They're their initial statement that they did not, you know, that they paid fat on inputs not purchases of certain inputs and their failure claim a duty drawback adjustment. As I understand your questioning then the REMA's figures on the bat that was paid but why don't the questionnaire answers which were the subject of some audit provide substantial evidence to support the conclusions reached and why is your objection anything more than based on simple speculation? Is there evidence to support your questioning of the questionnaire responses as audit? There is evidence, the evidence is that, you know, their statement, their unqualified statement that they paid fat on an input not that they paid it on some purchases of the given input that's the way they originally stated it. Also it is evidence that they did not claim a duty drawback adjustment and our view is that this evidence at a minimum required Congress to further investigate. In a case cited by REMA needs brief the CIT acknowledge that the Department may accept a document like that submitted by REMA on its face in the absence of evidence suggesting any to further investigate and we, you know, during the original review pointed out these specific discrepancies with respect to electros and asked Congress to verify it to examine it and they didn't examine that issue at all of the verification
. They only examined what they needed to examine to apply their their policy of excluding the fact when we're covered by any means other than remincering fund upon exploitation. I mean normally Congress does a good faith job of investigating what petitioners identify as an issue and they didn't really, I mean in our view they didn't do that in this case because they had this policy and they should have examined it at verification and in addition they should have they should have examined it during the two remans. I mean this was not a case that were only verification occurred. They conducted two remans in which the sole purpose was to include the amount of ad actually paid and they could have easily further investigated this issue. Part of the reason they didn't to be honest is that they they twice corrected the errors and then it was only after late process. That's your conjecture
. Well no it's in the record that they that they that they in the draft results did so they did they did they did change their you know the diverse of course but you're you're you're speculating as to that was the reason why they didn't do any further investigation. They you know they they also it is true that the government in its brief now identifies this worksheet which contains these discrepancies as alone substantial evidence but in its you know in those final results of the second reman the department actually stated that there was no evidence that that was not paid on these electors. That's a that's a new characterization that they put on it in their briefs but they acknowledged in their results there was no evidence that wasn't paid and in addition it's a well recognized principle it recognized by this court that you know what constitutes substantial evidence you know in determining whether there's substantial evidence you need to look at the whole record could have that much fairly detracts from the evidence and and we have identified such evidence that their statements that they paid on an input not in some purchases and also the fact they didn't claim a duty drawback adjustment which is important evidence suggesting at a minimum a need to first investigate it and that's you know at bottom of the work we're asking you to the errors be corrected or that there be an investigation so that the full amount of that can be incorporated. I'd like to address for a moment a part that we the second issue the case which is the department's policy before this court the department's to continue to press its policy excluding from CD that's constructive value when recovered by any excluding the taxes from CD when recovered by means other than we meant and so refund upon exportation and to nor the courts clear interpretation the statute in name core in Camargo this court stated in Camargo as an in court we see no reason to depart from the straightforward wording of section 1677 B therefore unless ICMS or remitted or refunded upon exportation they are properly included in the constructive value of the exported merchandise and quote we don't think the court could have been any clearer and that as this court has stated it is it is bound to follow its own precedent unless overturned by the Supreme Court or an in bond decision this court and we think that Camargo and in court are are clear and not capable any other reading this statute is clear and the court was clear it's important not to lose to say the fact that a portion of the recovery of value out of taxes in this case was by the very same crediting mechanism addressed by the court in important camarader which was the use of these accumulated fact credits to state other taxes in the until the Brazilian government in its brief in Camargo the department in fact asked this court to me man the case so that it could determine what portion of the back paid on inputs was recovered by these by this mechanism the court and we you cited the portions of their brief where they make that claim and the court issued no such instructions and held it unless the taxes are remitted or funded upon exportation they must be included in destructive value the only only distinction in this case is that we may use re-mute used another credit mechanism use of the fact credits to purchase inputs this mechanism just like using that credits to satisfy domestic tax obligations is unrelated to exportation of the subject merchandise and it just flat out does not constitute remittance or refund upon exportation but it's a functional equivalent measurement no it you what you're doing is taking you accumulate these fact credits over a long period of time from purchase of inputs consumed in other periods to produce other products and you're using those credits you know as a as a as a mechanism to reduce your overall cost but there it's it's not the same as recovering and there was no showing that they had recovered the that paid on the inputs you know the particular inputs consumed to produce the merchandise exported to the United States during this review period of course Brazilian law changed since our decisions in Amcourt and Camargo so the these credits are now more fungible are they not there was equivalent to cash it wasn't changed in a way that's that matters on the statute of VR would be our view the statute simply says you know has limiting language that this court interpreted to require including these taxes unless they're remitted or funded or funded upon exportation so it's not a not a change that makes any difference under either the courts interpretation or the language itself well the but the credits are equivalent to cash in effect they can be used to purchase inputs not simply to offset other taxes what's the single sense they're no longer subject to being lost they they're part of the calculus in almost every situation are they not well it's actually very similar the two mechanisms but they have an obligation to pay taxes in Brazil they have not mentioned to pay for their you know their inputs it's they're they're using in a way they're using them as a means of payment to satisfy both of those obligations but it doesn't certainly not what you know Congress identified as you know the situation in which these taxes could be excluded in the in the where the taxes are remitted or funded upon exportation there's a there's a direct nexus between the you know that the taxes paid on the inputs to produce this you know honest look at my own is being sent to the United States and the government of Brazil is refunding your bites nature what they're refunding is the tax paid on those inputs to produce that product that's purely ministerial though I mean that you can see it but if they're doing the same thing I'm just not crawling at that what's the difference well I don't think we don't think it's the same it's the same thing I mean they there are your preferences it needs to be well when you have that type of direct nexus it's very others there's a certain that that what's being what's being refunded it's the tax that was paid with these other types of mechanisms that that type of certainly doesn't exist and you know at the end of the day if the language of the statute is clear that's that's the end of the matter and we in our view Congress reasonably can could decide that that this is the only circumstance where there's this direct nexus that that tax would be excluded from constructive value and Congress is trying to go beyond but Congress provided for and that's that's just contrary to jurisprudence of the spring court in this court on what happens when the language is clear and a camaraderie was very in particular is very clear about how to read the statute and we think the court has to should and should it here to that seat do you want to save your rebuttal times yes yes Mr. Blades more than you are a regional blade representing the United States in this matter we have appealed the truck which is a bonus order that because the taxes are not remitted or refunded they must necessarily be included without any recognition of the possibility of recovery of offset and cannot be adjusted in terms of calculating constructive value when Congress attempts to well when Congress engages in determining constructive value of commerce essentially includes all costs connected with producing merchandise including taxes and tries as best as possible to determine as accurately as possible the actual cost incurred by a company whether it's for a material import such as charcoal or electricity or if it's some cost that's not that's otherwise not tangible such as taxes or interest of those kind of things this statute has been dealt with as the court is fully aware twice before in encorring comargo where the court recognized and there's no change here that the taxes that issue are not remitted or refunded upon exportation which is the instruction of the statute for when to exclude the taxes all that the United States is asking for now is a recognition that when the taxes are not remitted or refunded upon exportation as is the case with the Brazilian value added taxes that commerce may accurately account for the amount of taxes actually incurred in producing the merchandise the so you are arguing that the statute while specifying when the taxes must be excluded doesn't specify when the taxes must be included it does not specify when the tax must be included but presumably they should be included if they are a cost of producing the merchandise they should be excluded under the statute as a matter of law if they were remitted or refunded upon exportation otherwise they need to be considered in the calculation for determining constructive value so you eliminate the the set off entirely I'm sorry I didn't hear your title so that then you you would eliminate the the set off and just require that it be included if that explicit amount is not refunded no me no if if they're refunded at exportation then under the statute they must be excluded disregard it is the word that the statute uses without regard to is the words the statute use otherwise they taxes paid exist as a potential cost just as a cost for any other aspect of producing the merchandise and so determining accurately as possible the amount of taxes actually incurred is what commerce tries to do if they are offset or recovered in some manner then commerce will recognize that offset or recovery that was what I was asking yes me and and that is what the trial for what in this case precluded commerce from doing the trial for what in this case said because they're not remitted or refunded upon exportation and commerce cannot recognize any offset or recovery and accurately determine the amount of taxes that's why we have repealed because that's an erroneous rule that's not required by the statute it's not required by this court's prior decisions in either aim core or comago Elkham metals has appealed because they they would like commerce to impute some tax amount with regard to electrodes in this matter the only evidence on the record with regard to that are the verified questionnaire responses from Rima which gives an amount of barrier to taxes paid for the electrodes that's the amount that commerce ultimately decided was the correct amount to be used and that there was no basis for actually imputing some other amount as Elkham would ask would have commerce do and for that reason commerce in the final results ultimately decided that the the best course the course that had never supported by substantial evidence on the record was to use the verified questionnaire responses from Rima to with regard to electrodes and so for those reasons respectfully request the court to reverse the trial for its decision with regard to commerce's methodology and allow commerce to accurately account for taxes and to deny Elkham's appeal since there is no evidence to support the imputation that they would like commerce to make. Mr
. Stevens argued that some questions were raised as to the accuracy of the questionnaire responses and and commerce is audited results and suggested that under those circumstances commerce had an obligation to go back and take another look and reassess why is that not a sound argue. Commerce and when commerce conducts verification as in this case they travel to the actual location of the producer in this case in Brazil and examines their works and some of the matters that are going to be examined are announced to the company in advance so that the company can prepare for that and make sure it has all of the appropriate records available for commerce to examine. Some of the issues commerce may examine are not told to the company until commerce is actually there and so they're somewhat of a surprise to the company. Commerce does not and this court has recognized and improved the fact that commerce does not actually conduct a full-blown full-scale audit examining every single piece of paper connected with the questionnaire responses. In this case commerce decided what it would verify and including matters announced to the company in advance and surprise matters. Commerce found no significant discrepancy in any of the information that we might have provided in its questionnaire responses
. It is true as Mr. Stevens pointed out that specifically commerce did not look at this precise issue with regard to electrodes but determined that because it verified many aspects of rumors questionnaire responses and found no significant discrepancy that it was appropriate to accept as accurate all of rumors questionnaire responses. Even in the case of the questions raised with regard to the electrodes. Yes sir because as as your honor had suggested in your earlier questions Alchemist speculating as to what the amounts ought to be and whether there are to be any reporting for those particular months at all. There is no indication that this should be as commerce mentioned in its final results. There is no indication that this should not be and that what's on the record are the verified questionnaire responses from REMA and that is substantial evidence acceptable to determine that that is the appropriate amount for those taxes in the certain states
. Thank you. Okay thank you. Now Mr. Young, are you raising additional points? May I please the court? In Rosadrade, remember, Charles appearing on behalf of defendant, Professor Pellan Mima and Dr. S.A
. I'd like to begin by just spending a couple minutes on the electrodes issue that are raised in primary issue that are being appealed by Alchemist Globe. This issue has to be dismissed by the court based on the must be dismissed due to the failure of Alchemist Globe to raise this issue before the department and because and because for that reason they have failed to exhaust the Mr. Remy's. The allegation of inaccuracy that they have raised that there are facial errors in the amount of VAT reported as related to electrodes was never raised in the Mr. K. Speed before the department during the minister review of this case
. And second, they did never raise this issue in the CIT complaint file before this before the court in the national trade and third, they never raised this issue in the first initial brief for the motion for brief supporting the motion for judgment before the court of the national trade. Now turning to the administrative proceeding, not only did Globe and Alchem never raise this issue in the case rate which is normally where all parties raise all this issue for the department's consideration, they attached to the case brief a helpful work stream in which they calculated what the exact amount of VAT should be included. And this wasn't a worksheet that was prepared by REMA, it was based on information that REMA submitted before the department and they helped me attach this worksheet to the case brief and asked the department only to include this amount. So the irony is if the department had accepted Globe and Alchem's argument and accepted and included the amount that Alchem and Globe wanted to include, they in fact would have no standard to bring this issue before the court. Now when they appealed this case before the court of the national trade, the only issue that was included in the CIT complaint was whether the VAT amount, whether or not the VAT amount should be included in the first place. They never raised anything about the facial errors and accuracies and in fact in the brief file before the court of the national trade in their initial motion for judgment on the agency record, they in fact attached the same worksheet they had attached the case before the department as supporting their motion for judgment
. Therefore we believe that just as an initial matter this issue has cannot be brought before the court because this is exactly why the doctrine of the misremadies exist. So that factual issues regarding factual accuracies and accuracies can be determined by the agency who is best able to do so. Next issue that I like to just point out relates to the two precedents of two cases that this court decided, which is the AIM Court versus United States and Carrella versus United States, which related to the same VAT issue. There are two important distinctions that the court must consider when considering those two cases and whether those two case service precedes. One is that both of those cases were decided under the old version of the statute before the we're going around amendments act, amendments act, the amendments required by the act and second there are important differences in the facts of this case as compared to the fact of those two earlier cases. Well you're not saying that the new act should be applied to these facts that were, are you? When you say that the statute changed? That's correct, Your Honor. Are you saying that the new statute should be applied to these facts? Absolutely, Your Honor. I mean not the new fact should be applied to the old fact of the old cases but the decision is that this court had made in the AIM Court in the Carrella where this war depended on the requirement of the statute as it existed at that time. This is not the case here. We have a new version of the statute which explicitly and specifically I'm referring to the timing requirement which this court was concerned with mostly in both AIM Court and the Carrella Courier case. In the old version of the statute that relates to the cost of materials, there was a specific phrase that required the department to determine costs that preceded data of exploitation and therefore this court appell the department's decision and finding that that the respondent in that case did not meet that burden because they couldn't show that the cost was incurred before the data of exploitation. That cost was explicitly deleted in the new version of the statute
. Are you saying that the new statute should be applied to these facts? Absolutely, Your Honor. I mean not the new fact should be applied to the old fact of the old cases but the decision is that this court had made in the AIM Court in the Carrella where this war depended on the requirement of the statute as it existed at that time. This is not the case here. We have a new version of the statute which explicitly and specifically I'm referring to the timing requirement which this court was concerned with mostly in both AIM Court and the Carrella Courier case. In the old version of the statute that relates to the cost of materials, there was a specific phrase that required the department to determine costs that preceded data of exploitation and therefore this court appell the department's decision and finding that that the respondent in that case did not meet that burden because they couldn't show that the cost was incurred before the data of exploitation. That cost was explicitly deleted in the new version of the statute. Therefore the timing requirement that the special the commercial court was a specific concerning with does not apply in this case. I see my time is up. Yes, it is. Thank you, Mr. Jim. Mr
. Therefore the timing requirement that the special the commercial court was a specific concerning with does not apply in this case. I see my time is up. Yes, it is. Thank you, Mr. Jim. Mr. Stevens, we may have your full rebuttal time. We've run over with Mr. Blaine's presentation. One thing we want to make clear is that the department did not, as they admit, they did not conduct a full-blown audit at verification. They examined some of me as data that parts that they chose on the vat issue. They examined what they chose to which was facts that are completely irrelevant under this court's decisions and come are going in court whether we have recovered or used these credits to recover some of these accumulated vat credits that they had
. Stevens, we may have your full rebuttal time. We've run over with Mr. Blaine's presentation. One thing we want to make clear is that the department did not, as they admit, they did not conduct a full-blown audit at verification. They examined some of me as data that parts that they chose on the vat issue. They examined what they chose to which was facts that are completely irrelevant under this court's decisions and come are going in court whether we have recovered or used these credits to recover some of these accumulated vat credits that they had. They did not examine any way should reform the vat paid on inputs and they didn't do that during the two remands as well. We'd also like to be clear it's we're not speculating that on this question, this isn't an important input that you have to consume in this continuous process and as vat is payable. How about the point that you've ever raised any of this in the administrative process? What we did, we did, you could appendix of 8081 and it shows where we specifically filed a comment to the Department of Commerce raising this issue during the original review and under the CIT's decision in inquiry which we've cited in our brief, raising comments before the department is sufficient to exhaust administrative remedies. It's also important to keep in mind the context of this in our, the comments decided not to put in any amount of that payable. How about the point that you didn't put it into the complaint when you filed in court? We were, what we asked consistently, if you look at our overall submissions, the complaint, our briefs, the comments, the department, the briefs, the department, our motion for judgment for the CIT, what we've always asked for is the department needs to include the vat paid. And it was never qualified as to any particular amount and it's just not even true that counsel for Rema said that we attached the work sheet that quote, you know quote, that we offered to calculate the exact amount and that's just untrue
. They did not examine any way should reform the vat paid on inputs and they didn't do that during the two remands as well. We'd also like to be clear it's we're not speculating that on this question, this isn't an important input that you have to consume in this continuous process and as vat is payable. How about the point that you've ever raised any of this in the administrative process? What we did, we did, you could appendix of 8081 and it shows where we specifically filed a comment to the Department of Commerce raising this issue during the original review and under the CIT's decision in inquiry which we've cited in our brief, raising comments before the department is sufficient to exhaust administrative remedies. It's also important to keep in mind the context of this in our, the comments decided not to put in any amount of that payable. How about the point that you didn't put it into the complaint when you filed in court? We were, what we asked consistently, if you look at our overall submissions, the complaint, our briefs, the comments, the department, the briefs, the department, our motion for judgment for the CIT, what we've always asked for is the department needs to include the vat paid. And it was never qualified as to any particular amount and it's just not even true that counsel for Rema said that we attached the work sheet that quote, you know quote, that we offered to calculate the exact amount and that's just untrue. The worksheet that was attached, you know on its, at the very top had embold estimate. And before the department, we were arguing whether to include these taxes at all. They, they didn't include any amount so we couldn't, we couldn't even challenge in our complaint or in the, you know in our brief, their particular amount included, they hadn't included anything. So we were, the whole focus was on, you know, to put these in period and you know at that stage, it was only, they didn't only put amounts in in the draft results of the, well even in the draft results of the, I'm sorry, the final results of the second Rema is the first time the commerce put in any amount of tax that we could even say is you're the wrong amount that commerce used. Mr. Stevenson, the decision in Elkham 1, the Court of International Trade made the statement that quote, when internal taxes are not refunded or remitted upon exportation of the subject merchandise, commerce must include such internal taxes paid on inputs in its calculation of CB, those quote, we're lying on Kamargo
. The worksheet that was attached, you know on its, at the very top had embold estimate. And before the department, we were arguing whether to include these taxes at all. They, they didn't include any amount so we couldn't, we couldn't even challenge in our complaint or in the, you know in our brief, their particular amount included, they hadn't included anything. So we were, the whole focus was on, you know, to put these in period and you know at that stage, it was only, they didn't only put amounts in in the draft results of the, well even in the draft results of the, I'm sorry, the final results of the second Rema is the first time the commerce put in any amount of tax that we could even say is you're the wrong amount that commerce used. Mr. Stevenson, the decision in Elkham 1, the Court of International Trade made the statement that quote, when internal taxes are not refunded or remitted upon exportation of the subject merchandise, commerce must include such internal taxes paid on inputs in its calculation of CB, those quote, we're lying on Kamargo. That, that may be something that the court derived from the Kamargo decision, but that's not what the statute says, is that correct? Well, the statute says that constructive value will be the cost of materials. You know my statute here. Now the statute specifies that the taxes that are remitted or refunded will be excluded, clearly, but the statute doesn't say that if the taxes are not remitted or refunded, they must necessarily be included. It's a clear implication that the court found in Kamargo, that that's what the statute said. But commerce is not interpreting the statute that way. You can read the statute that way, certainly, but you can also read the statute as being open ended, leaving commerce with the flexibility to make its assessment of constructed value based on all the factors that it believes are appropriate to determine cost
. That, that may be something that the court derived from the Kamargo decision, but that's not what the statute says, is that correct? Well, the statute says that constructive value will be the cost of materials. You know my statute here. Now the statute specifies that the taxes that are remitted or refunded will be excluded, clearly, but the statute doesn't say that if the taxes are not remitted or refunded, they must necessarily be included. It's a clear implication that the court found in Kamargo, that that's what the statute said. But commerce is not interpreting the statute that way. You can read the statute that way, certainly, but you can also read the statute as being open ended, leaving commerce with the flexibility to make its assessment of constructed value based on all the factors that it believes are appropriate to determine cost. Well, commerce has at various points in time interpreted the statute the exact way that the court, we think the court did in Kamargo and in A-Core. In A-Core, they were arguing the statute should be read that way before this court. And in Kamargo and they were arguing that the statute should be read that way as clear before the CIT in Kamargo, they were taking that position. But in those cases, the taxes were refunded or remitted. No, that it has always been the case in Brazil that the taxes are not remitted or refunded upon exportation. Any more questions? Any more questions? Mr
. Well, commerce has at various points in time interpreted the statute the exact way that the court, we think the court did in Kamargo and in A-Core. In A-Core, they were arguing the statute should be read that way before this court. And in Kamargo and they were arguing that the statute should be read that way as clear before the CIT in Kamargo, they were taking that position. But in those cases, the taxes were refunded or remitted. No, that it has always been the case in Brazil that the taxes are not remitted or refunded upon exportation. Any more questions? Any more questions? Mr. Stevens? Okay, thank you, Mr. Stevens. Mr. Pleiard. Mr. Jones, the case has taken under submission
. Stevens? Okay, thank you, Mr. Stevens. Mr. Pleiard. Mr. Jones, the case has taken under submission.
The Department of Commerce has a policy of excluding value-annot taxes paid on inputs from constructive value when credited against taxes over the government or recovered by any other means. Here the Department applied this policy notwithstanding two decisions of this court interpreting the statute to require including such that in CV unless remitted over funded upon exportation. In this case the reported that on its face contained errors and it was not the full amount of that paid. Most critically we might fail to report that for electrodes consumed in particular months of the period of review. The Department neither corrected the facial errors in the reported that for electrodes nor determined the full amount of that paid. The record does not support the department's failure to either correct the errors or as it twice did before reversing itself or determine the full amount of that paid. Electroids are necessary to produce silicon metal. Thus in each month that we may produce silicon metal it consumed electrodes. In the review we must state that it paid fat on the purchase of certain inputs not that it paid fat on some of its purchases of a given input. Fat would not be paid on particular electrodes only if they were imported and the import duties in associated fat were suspended or refunded under the Brazilian drawback system based on exportation of the finished product. There is no evidence in this case that we may use this system to avoid payment of fat on the electrodes consumed during the months in question. We may never, you know, importantly we may never claimed in its original response in the review a duty drawback adjustment which it had every right to do and every incentive to do had it imported electrodes under this system and thereby avoided payment of fat on those electrodes. In fact it flat out stated that there was quote there was no duty drawback during the ORN quote. This was during this was in their questionnaire response in the review. Years later only after the department had twice corrected these errors in the draft results of the first and second remands only after the draft result of the second remand did REMA come forth with a brand new claim that the reason why fat wasn't reported for these electrodes was that they were important which is directly contrary to this evidence. They're their initial statement that they did not, you know, that they paid fat on inputs not purchases of certain inputs and their failure claim a duty drawback adjustment. As I understand your questioning then the REMA's figures on the bat that was paid but why don't the questionnaire answers which were the subject of some audit provide substantial evidence to support the conclusions reached and why is your objection anything more than based on simple speculation? Is there evidence to support your questioning of the questionnaire responses as audit? There is evidence, the evidence is that, you know, their statement, their unqualified statement that they paid fat on an input not that they paid it on some purchases of the given input that's the way they originally stated it. Also it is evidence that they did not claim a duty drawback adjustment and our view is that this evidence at a minimum required Congress to further investigate. In a case cited by REMA needs brief the CIT acknowledge that the Department may accept a document like that submitted by REMA on its face in the absence of evidence suggesting any to further investigate and we, you know, during the original review pointed out these specific discrepancies with respect to electros and asked Congress to verify it to examine it and they didn't examine that issue at all of the verification. They only examined what they needed to examine to apply their their policy of excluding the fact when we're covered by any means other than remincering fund upon exploitation. I mean normally Congress does a good faith job of investigating what petitioners identify as an issue and they didn't really, I mean in our view they didn't do that in this case because they had this policy and they should have examined it at verification and in addition they should have they should have examined it during the two remans. I mean this was not a case that were only verification occurred. They conducted two remans in which the sole purpose was to include the amount of ad actually paid and they could have easily further investigated this issue. Part of the reason they didn't to be honest is that they they twice corrected the errors and then it was only after late process. That's your conjecture. Well no it's in the record that they that they that they in the draft results did so they did they did they did change their you know the diverse of course but you're you're you're speculating as to that was the reason why they didn't do any further investigation. They you know they they also it is true that the government in its brief now identifies this worksheet which contains these discrepancies as alone substantial evidence but in its you know in those final results of the second reman the department actually stated that there was no evidence that that was not paid on these electors. That's a that's a new characterization that they put on it in their briefs but they acknowledged in their results there was no evidence that wasn't paid and in addition it's a well recognized principle it recognized by this court that you know what constitutes substantial evidence you know in determining whether there's substantial evidence you need to look at the whole record could have that much fairly detracts from the evidence and and we have identified such evidence that their statements that they paid on an input not in some purchases and also the fact they didn't claim a duty drawback adjustment which is important evidence suggesting at a minimum a need to first investigate it and that's you know at bottom of the work we're asking you to the errors be corrected or that there be an investigation so that the full amount of that can be incorporated. I'd like to address for a moment a part that we the second issue the case which is the department's policy before this court the department's to continue to press its policy excluding from CD that's constructive value when recovered by any excluding the taxes from CD when recovered by means other than we meant and so refund upon exportation and to nor the courts clear interpretation the statute in name core in Camargo this court stated in Camargo as an in court we see no reason to depart from the straightforward wording of section 1677 B therefore unless ICMS or remitted or refunded upon exportation they are properly included in the constructive value of the exported merchandise and quote we don't think the court could have been any clearer and that as this court has stated it is it is bound to follow its own precedent unless overturned by the Supreme Court or an in bond decision this court and we think that Camargo and in court are are clear and not capable any other reading this statute is clear and the court was clear it's important not to lose to say the fact that a portion of the recovery of value out of taxes in this case was by the very same crediting mechanism addressed by the court in important camarader which was the use of these accumulated fact credits to state other taxes in the until the Brazilian government in its brief in Camargo the department in fact asked this court to me man the case so that it could determine what portion of the back paid on inputs was recovered by these by this mechanism the court and we you cited the portions of their brief where they make that claim and the court issued no such instructions and held it unless the taxes are remitted or funded upon exportation they must be included in destructive value the only only distinction in this case is that we may use re-mute used another credit mechanism use of the fact credits to purchase inputs this mechanism just like using that credits to satisfy domestic tax obligations is unrelated to exportation of the subject merchandise and it just flat out does not constitute remittance or refund upon exportation but it's a functional equivalent measurement no it you what you're doing is taking you accumulate these fact credits over a long period of time from purchase of inputs consumed in other periods to produce other products and you're using those credits you know as a as a as a mechanism to reduce your overall cost but there it's it's not the same as recovering and there was no showing that they had recovered the that paid on the inputs you know the particular inputs consumed to produce the merchandise exported to the United States during this review period of course Brazilian law changed since our decisions in Amcourt and Camargo so the these credits are now more fungible are they not there was equivalent to cash it wasn't changed in a way that's that matters on the statute of VR would be our view the statute simply says you know has limiting language that this court interpreted to require including these taxes unless they're remitted or funded or funded upon exportation so it's not a not a change that makes any difference under either the courts interpretation or the language itself well the but the credits are equivalent to cash in effect they can be used to purchase inputs not simply to offset other taxes what's the single sense they're no longer subject to being lost they they're part of the calculus in almost every situation are they not well it's actually very similar the two mechanisms but they have an obligation to pay taxes in Brazil they have not mentioned to pay for their you know their inputs it's they're they're using in a way they're using them as a means of payment to satisfy both of those obligations but it doesn't certainly not what you know Congress identified as you know the situation in which these taxes could be excluded in the in the where the taxes are remitted or funded upon exportation there's a there's a direct nexus between the you know that the taxes paid on the inputs to produce this you know honest look at my own is being sent to the United States and the government of Brazil is refunding your bites nature what they're refunding is the tax paid on those inputs to produce that product that's purely ministerial though I mean that you can see it but if they're doing the same thing I'm just not crawling at that what's the difference well I don't think we don't think it's the same it's the same thing I mean they there are your preferences it needs to be well when you have that type of direct nexus it's very others there's a certain that that what's being what's being refunded it's the tax that was paid with these other types of mechanisms that that type of certainly doesn't exist and you know at the end of the day if the language of the statute is clear that's that's the end of the matter and we in our view Congress reasonably can could decide that that this is the only circumstance where there's this direct nexus that that tax would be excluded from constructive value and Congress is trying to go beyond but Congress provided for and that's that's just contrary to jurisprudence of the spring court in this court on what happens when the language is clear and a camaraderie was very in particular is very clear about how to read the statute and we think the court has to should and should it here to that seat do you want to save your rebuttal times yes yes Mr. Blades more than you are a regional blade representing the United States in this matter we have appealed the truck which is a bonus order that because the taxes are not remitted or refunded they must necessarily be included without any recognition of the possibility of recovery of offset and cannot be adjusted in terms of calculating constructive value when Congress attempts to well when Congress engages in determining constructive value of commerce essentially includes all costs connected with producing merchandise including taxes and tries as best as possible to determine as accurately as possible the actual cost incurred by a company whether it's for a material import such as charcoal or electricity or if it's some cost that's not that's otherwise not tangible such as taxes or interest of those kind of things this statute has been dealt with as the court is fully aware twice before in encorring comargo where the court recognized and there's no change here that the taxes that issue are not remitted or refunded upon exportation which is the instruction of the statute for when to exclude the taxes all that the United States is asking for now is a recognition that when the taxes are not remitted or refunded upon exportation as is the case with the Brazilian value added taxes that commerce may accurately account for the amount of taxes actually incurred in producing the merchandise the so you are arguing that the statute while specifying when the taxes must be excluded doesn't specify when the taxes must be included it does not specify when the tax must be included but presumably they should be included if they are a cost of producing the merchandise they should be excluded under the statute as a matter of law if they were remitted or refunded upon exportation otherwise they need to be considered in the calculation for determining constructive value so you eliminate the the set off entirely I'm sorry I didn't hear your title so that then you you would eliminate the the set off and just require that it be included if that explicit amount is not refunded no me no if if they're refunded at exportation then under the statute they must be excluded disregard it is the word that the statute uses without regard to is the words the statute use otherwise they taxes paid exist as a potential cost just as a cost for any other aspect of producing the merchandise and so determining accurately as possible the amount of taxes actually incurred is what commerce tries to do if they are offset or recovered in some manner then commerce will recognize that offset or recovery that was what I was asking yes me and and that is what the trial for what in this case precluded commerce from doing the trial for what in this case said because they're not remitted or refunded upon exportation and commerce cannot recognize any offset or recovery and accurately determine the amount of taxes that's why we have repealed because that's an erroneous rule that's not required by the statute it's not required by this court's prior decisions in either aim core or comago Elkham metals has appealed because they they would like commerce to impute some tax amount with regard to electrodes in this matter the only evidence on the record with regard to that are the verified questionnaire responses from Rima which gives an amount of barrier to taxes paid for the electrodes that's the amount that commerce ultimately decided was the correct amount to be used and that there was no basis for actually imputing some other amount as Elkham would ask would have commerce do and for that reason commerce in the final results ultimately decided that the the best course the course that had never supported by substantial evidence on the record was to use the verified questionnaire responses from Rima to with regard to electrodes and so for those reasons respectfully request the court to reverse the trial for its decision with regard to commerce's methodology and allow commerce to accurately account for taxes and to deny Elkham's appeal since there is no evidence to support the imputation that they would like commerce to make. Mr. Stevens argued that some questions were raised as to the accuracy of the questionnaire responses and and commerce is audited results and suggested that under those circumstances commerce had an obligation to go back and take another look and reassess why is that not a sound argue. Commerce and when commerce conducts verification as in this case they travel to the actual location of the producer in this case in Brazil and examines their works and some of the matters that are going to be examined are announced to the company in advance so that the company can prepare for that and make sure it has all of the appropriate records available for commerce to examine. Some of the issues commerce may examine are not told to the company until commerce is actually there and so they're somewhat of a surprise to the company. Commerce does not and this court has recognized and improved the fact that commerce does not actually conduct a full-blown full-scale audit examining every single piece of paper connected with the questionnaire responses. In this case commerce decided what it would verify and including matters announced to the company in advance and surprise matters. Commerce found no significant discrepancy in any of the information that we might have provided in its questionnaire responses. It is true as Mr. Stevens pointed out that specifically commerce did not look at this precise issue with regard to electrodes but determined that because it verified many aspects of rumors questionnaire responses and found no significant discrepancy that it was appropriate to accept as accurate all of rumors questionnaire responses. Even in the case of the questions raised with regard to the electrodes. Yes sir because as as your honor had suggested in your earlier questions Alchemist speculating as to what the amounts ought to be and whether there are to be any reporting for those particular months at all. There is no indication that this should be as commerce mentioned in its final results. There is no indication that this should not be and that what's on the record are the verified questionnaire responses from REMA and that is substantial evidence acceptable to determine that that is the appropriate amount for those taxes in the certain states. Thank you. Okay thank you. Now Mr. Young, are you raising additional points? May I please the court? In Rosadrade, remember, Charles appearing on behalf of defendant, Professor Pellan Mima and Dr. S.A. I'd like to begin by just spending a couple minutes on the electrodes issue that are raised in primary issue that are being appealed by Alchemist Globe. This issue has to be dismissed by the court based on the must be dismissed due to the failure of Alchemist Globe to raise this issue before the department and because and because for that reason they have failed to exhaust the Mr. Remy's. The allegation of inaccuracy that they have raised that there are facial errors in the amount of VAT reported as related to electrodes was never raised in the Mr. K. Speed before the department during the minister review of this case. And second, they did never raise this issue in the CIT complaint file before this before the court in the national trade and third, they never raised this issue in the first initial brief for the motion for brief supporting the motion for judgment before the court of the national trade. Now turning to the administrative proceeding, not only did Globe and Alchem never raise this issue in the case rate which is normally where all parties raise all this issue for the department's consideration, they attached to the case brief a helpful work stream in which they calculated what the exact amount of VAT should be included. And this wasn't a worksheet that was prepared by REMA, it was based on information that REMA submitted before the department and they helped me attach this worksheet to the case brief and asked the department only to include this amount. So the irony is if the department had accepted Globe and Alchem's argument and accepted and included the amount that Alchem and Globe wanted to include, they in fact would have no standard to bring this issue before the court. Now when they appealed this case before the court of the national trade, the only issue that was included in the CIT complaint was whether the VAT amount, whether or not the VAT amount should be included in the first place. They never raised anything about the facial errors and accuracies and in fact in the brief file before the court of the national trade in their initial motion for judgment on the agency record, they in fact attached the same worksheet they had attached the case before the department as supporting their motion for judgment. Therefore we believe that just as an initial matter this issue has cannot be brought before the court because this is exactly why the doctrine of the misremadies exist. So that factual issues regarding factual accuracies and accuracies can be determined by the agency who is best able to do so. Next issue that I like to just point out relates to the two precedents of two cases that this court decided, which is the AIM Court versus United States and Carrella versus United States, which related to the same VAT issue. There are two important distinctions that the court must consider when considering those two cases and whether those two case service precedes. One is that both of those cases were decided under the old version of the statute before the we're going around amendments act, amendments act, the amendments required by the act and second there are important differences in the facts of this case as compared to the fact of those two earlier cases. Well you're not saying that the new act should be applied to these facts that were, are you? When you say that the statute changed? That's correct, Your Honor. Are you saying that the new statute should be applied to these facts? Absolutely, Your Honor. I mean not the new fact should be applied to the old fact of the old cases but the decision is that this court had made in the AIM Court in the Carrella where this war depended on the requirement of the statute as it existed at that time. This is not the case here. We have a new version of the statute which explicitly and specifically I'm referring to the timing requirement which this court was concerned with mostly in both AIM Court and the Carrella Courier case. In the old version of the statute that relates to the cost of materials, there was a specific phrase that required the department to determine costs that preceded data of exploitation and therefore this court appell the department's decision and finding that that the respondent in that case did not meet that burden because they couldn't show that the cost was incurred before the data of exploitation. That cost was explicitly deleted in the new version of the statute. Therefore the timing requirement that the special the commercial court was a specific concerning with does not apply in this case. I see my time is up. Yes, it is. Thank you, Mr. Jim. Mr. Stevens, we may have your full rebuttal time. We've run over with Mr. Blaine's presentation. One thing we want to make clear is that the department did not, as they admit, they did not conduct a full-blown audit at verification. They examined some of me as data that parts that they chose on the vat issue. They examined what they chose to which was facts that are completely irrelevant under this court's decisions and come are going in court whether we have recovered or used these credits to recover some of these accumulated vat credits that they had. They did not examine any way should reform the vat paid on inputs and they didn't do that during the two remands as well. We'd also like to be clear it's we're not speculating that on this question, this isn't an important input that you have to consume in this continuous process and as vat is payable. How about the point that you've ever raised any of this in the administrative process? What we did, we did, you could appendix of 8081 and it shows where we specifically filed a comment to the Department of Commerce raising this issue during the original review and under the CIT's decision in inquiry which we've cited in our brief, raising comments before the department is sufficient to exhaust administrative remedies. It's also important to keep in mind the context of this in our, the comments decided not to put in any amount of that payable. How about the point that you didn't put it into the complaint when you filed in court? We were, what we asked consistently, if you look at our overall submissions, the complaint, our briefs, the comments, the department, the briefs, the department, our motion for judgment for the CIT, what we've always asked for is the department needs to include the vat paid. And it was never qualified as to any particular amount and it's just not even true that counsel for Rema said that we attached the work sheet that quote, you know quote, that we offered to calculate the exact amount and that's just untrue. The worksheet that was attached, you know on its, at the very top had embold estimate. And before the department, we were arguing whether to include these taxes at all. They, they didn't include any amount so we couldn't, we couldn't even challenge in our complaint or in the, you know in our brief, their particular amount included, they hadn't included anything. So we were, the whole focus was on, you know, to put these in period and you know at that stage, it was only, they didn't only put amounts in in the draft results of the, well even in the draft results of the, I'm sorry, the final results of the second Rema is the first time the commerce put in any amount of tax that we could even say is you're the wrong amount that commerce used. Mr. Stevenson, the decision in Elkham 1, the Court of International Trade made the statement that quote, when internal taxes are not refunded or remitted upon exportation of the subject merchandise, commerce must include such internal taxes paid on inputs in its calculation of CB, those quote, we're lying on Kamargo. That, that may be something that the court derived from the Kamargo decision, but that's not what the statute says, is that correct? Well, the statute says that constructive value will be the cost of materials. You know my statute here. Now the statute specifies that the taxes that are remitted or refunded will be excluded, clearly, but the statute doesn't say that if the taxes are not remitted or refunded, they must necessarily be included. It's a clear implication that the court found in Kamargo, that that's what the statute said. But commerce is not interpreting the statute that way. You can read the statute that way, certainly, but you can also read the statute as being open ended, leaving commerce with the flexibility to make its assessment of constructed value based on all the factors that it believes are appropriate to determine cost. Well, commerce has at various points in time interpreted the statute the exact way that the court, we think the court did in Kamargo and in A-Core. In A-Core, they were arguing the statute should be read that way before this court. And in Kamargo and they were arguing that the statute should be read that way as clear before the CIT in Kamargo, they were taking that position. But in those cases, the taxes were refunded or remitted. No, that it has always been the case in Brazil that the taxes are not remitted or refunded upon exportation. Any more questions? Any more questions? Mr. Stevens? Okay, thank you, Mr. Stevens. Mr. Pleiard. Mr. Jones, the case has taken under submission