Full opinion text
WALLACH, Judge. I INTRODUCTION At issue in this case are several aspects of the Department of Commerce, International Trade Administration’s (“Commerce” or the “Department”) Notice of Final Determination of Sales at Less Than Fair Value; Stainless Steel Sheet and Strip in Coils From Italy, 64 Fed. Reg. 30750 (Dep’t Commerce 1999) {“Final Determination”), as amended by 64 Fed. Reg. 40567 (Dep’t Commerce 1999) (“Amended Final Determination”) in which Commerce found that Plaintiffs, Ae-ciai Speciali Terni S.p.A. and Acciai Speci-ali Terni USA, Inc. (collectively “AST”) were selling their products for less than fair value (i.e. dumping) in the United States. Plaintiff AST and Defendant-In-tervenors Zanesville Armco Independent Organization, et al, through respective Motions For Judgment On The Agency Record, pursuant to USCIT Rule 56.2, challenge the Final Determination. For the reasons set forth below, the Final Determination is affirmed in part and remanded in part. II BACKGROUND AST is a producer and exporter/importer of steel products. See Initiation of Antidumping Duty Investigations: Stainless Steel Sheet and Strip in Coils From France, Germany, Italy, Japan, Mexico, South Korea, Taiwan, and the United Kingdom, 63 Fed.Reg. 37521, 37524 (Dep’t Commerce 1998). A related key player in this investigation is an affiliated reseller identified in Commerce’s determinations as reseller 001 (“USR”). See Final Determination at 30750 (referring to reseller 001 as AST’s “affiliated U.S. reseller”). On June 30, 1998, Commerce initiated antidumping investigations of imports of stainless steel sheet and strip (“SSSS”) in coils from several countries, including Italy. See Initiation of Antidumping Duty Investigations: Stainless Steel Sheet and Strip in Coils From France, Germany, Italy, Japan, Mexico, South Korea, Taiwan, and the United Kingdom, 63 Fed. Reg. 37521 (Dep’t Commerce 1998). On December 17, 1998, Commerce issued its Preliminary Determination. See Notice of Preliminary Determination for Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils From Italy, 64 Fed.Reg. 116 (Dep’t Commerce 1999). On June 8, 1999, Commerce issued the Final Determination. The Department amended the Final Determination on July 27, 1999, to correct certain ministerial errors. See Amended Final Determination. A Commerce Found the Database Prepared by USR Had Pervasive Errors, and Applied Adverse Facts Available. In the course of the investigation, Commerce “requested AST to provide information for all affiliates involved in the production or sale of the subject merchandise in the foreign market or the United States.” Memorandum of the United States in Opposition to the Motion of Acciai Speciali Terni S.p.A. For Judgment upon the Agency Record (“Defendant’s Response to Plaintiffs’ Motion”) at 3 (citing Dep’t Commerce Questionnaire at G-6 (Aug. 3, 1998) (“Prepare a single response that includes information, including financial statements, for all affiliates involved with the production or sale of the products under investigation dining the period of investigation (‘POI’) in the foreign market or the United States market or both. Include the sales and cost of these affiliates with your sales and cost in the same computer data file(s) and submit a single narrative response.”)). In its response AST did not provide complete downstream sales data for its affiliates, stating instead that: AST continues to believe that it should not be required to submit any data on downstream sales by resellers that might be deemed to be affiliated companies. Nevertheless, to respond to the Department’s request for transaction-specific home market downstream sales data, AST solicited this data from the specific resellers_ Unfortunately, ... AST cannot compel the resellers in which it has only a minority interest to provide the requested data. Though AST asked these resellers to provide this data and offered to assist in the compilation and preparation of the data, the minority-owned resellers declined to cooperate. Letter from Counsel for AST to Commerce, November 12, 1998, at 3. In reply, Commerce issued a deficiency letter in which it reiterated its request for the downstream sales data by AST’s affiliates in the U.S. market. Letter from Commerce to counsel for AST, November 27, 1998 (“[W]e request the following information .... the downstream sales of.... ”). AST did provide downstream sales information for USR. AST submitted a database prepared by USR containing information on further manufacturing and downstream sales. The database was first submitted to Commerce on December 11, 1998, and was then modified and resubmitted to Commerce on January 15, 1999. See Letters from Counsel for AST to Commerce, December 11, 1998 (“enclosed ... [is] AST’s response to the Department’s November 27, 1998 request for data on downstream sales and further manufacturing by [USR and other resellers].”) and January 15, 1999 (“enclosed ... [is] AST’s response to the Department’s January 8, 1999 request for additional information from [USR] ... This submission also corrects certain minor errors in the data previously submitted....”). At verification, Commerce noted discrepancies between the database submitted to it and the records of USR. It found sales which were not attributed to suppliers, misallocated processing costs, incorrectly applied buffing costs, inaccurately reported quantity surcharges, and inaccurately allocated respinning costs. Final Determination at 30758-60. In the Final Determination, Commerce held that those discrepancies undermined the entire sales database prepared by USR. It stated that “the frequency of the errors and the absence on the record of information necessary to correct certain of these errors serve to undermine the overall credibility of the further-manufacturing response as a whole, thus compelling the Department to rely upon total facts available for further-manufactured sales by” USR. Id. at 30758. Commerce identified discrepancies in the program in regard to widths of further-processed coils. It stated that: [USR] created a computer program ... which sought to match an input coil to each output coil sold and to assign a cost for each processing step through which the finished coil supposedly passed. As noted, at verification we tested this computer program to assess its accuracy and reliability and found that seven of eighteen transactions tested contained errors in either the allocation of processing costs or in the matching of input coils to output coils. In two of these cases [USR] had assigned processing costs to products which had, in fact, undergone no processing whatever. We note that this discrepancy arose from the input coils and output coils identified by [USR]’s own computer program. In another transaction the combined widths of the finished products were greater than the original width of the input coil as identified by the system, an obvious physical impossibility that should have been identified by [USR] as an error. Final Determination at 30759. Commerce also found errors in the reported finishing costs, stating that “[certain coils with a pre-buff finish applied to the underside had no finishing costs reported for the additional processing.” Id. Finally, Commerce noted that “other transactions contained errors in the application of surcharges for processing small quantity orders.” Id. As to the finishing costs and small quantity surcharges, Commerce stated “both errors reduced the costs allocated to further processed products, thus creating further doubts as to the accuracy of the underlying reporting methodology.” Id. “In this case a partial correction is not a viable option, because of both the high percentage of errors found through our sample testing and the fact that some of the errors cannot be corrected with information on the record. Therefore, pursuant to section 776(a) of the Act, facts otherwise available are applicable to the downstream sales of’ USR. Id. at 30760. Commerce held that “the fundamental and pervasive nature of these errors raises concerns as to the validity not only of the data subjected to direct testing, but of the remainder of the response as well.” Id. at 30758. Furthermore: [t]he computer programming used by [USR] to identify its products’ physical characteristics and to match each of these products with its associated costs were found at verification to be accomplishing neither end consistently or accurately. Moreover, both the frequency of the errors and the absence on the record of information necessary to correct certain of these errors serve to undermine the overall credibility of the further-manufacturing response as a whole, thus compelling the Department to rely upon total facts available for further-manufactured sales by [USR]. Id. This rejection having left a gap in the necessary data, Commerce resorted to facts available. Commerce also determined that AST had not acted to the best of its ability in creating this database with USR, because: not only do such fundamental errors as found at verification raise concerns as to the validity of the data not directly tested, but they also demonstrate that the respondent failed to act to the best of its ability to report such information. Indeed, a reasonable check by company officials could have shown that (1) products that underwent no further processing were being assigned further-manufacturing costs, (2) further-processed products were not being assigned further-processing costs, (3) coils passing through certain processes were not being allocated any cost for the process, and (4) the output width of slit coils generated by a given master coil exceeded the original width of that input coil. Id. at 30760. Commerce applied adverse facts available to sales unattributed by USR to a specific supplier, and stated that “it is appropriate to [do so], because these sales were unverifiable. In addition, ... [a]t verification, we found that [USR] could have supplied the Department with the supplier names for these unattributed sales.” Id. B Commerce Rejected AST’s Attempt to Submit Additional Sales it Discovered Preparing for Verification. The U.S. sales database prepared by AST did not include a set of 84 sales. Letter from Counsel for AST to Commerce, February 24, 1999. AST came forward with a list of these sales (“the additional sales”) on February 24, 1999. Id. The additional sales equaled roughly [ ] of the total U.S. sales reported. This submission to Commerce was made after the January 15, 1999, deadline for filing AST’s response to the last supplemental questionnaire on this issue. Letter from Commerce to Counsel for AST, January 8, 1999 (“The additional information requested in the attachment is due by January 15, 1999, along with the appropriate summarization of proprietary data, as required by 19 CFR 351.904.”) When it requested the information, Commerce informed AST that “[p]ursuant to 19 CFR 302(d), any information submitted after this date will be untimely filed and will be returned to you.” Id. Commerce rejected this list of sales submitted on February 24, 1999 as an untimely response. Final Determination at n. 6. Commerce applied adverse facts available for the unreported U.S. sales, because it found that “[flailure to report significant amounts of import data, such as U.S. sales data, indicates a lack of best efforts, unless there are extenuating circumstances that explain the failure. There is no evidence of such circumstances in this case.” Id. at 30757. C Commerce Treated AST’s Sales of Side-Cuts and Pup Coils as Prime Merchandise Because it Found AST Had Failed to Support its Claim That They Were Non-Prime. Commerce’s questionnaire regarding AST’s U.S. sales database required that the field labeled PRIMEH contain the following information: DESCRIPTION: Indicate whether the merchandise is prime or non-prime (secondary) merchandise. Please note that if subject merchandise meets a specification, it should not be classified as non-prime merchandise solely because it does not meet the specification originally intended. 1 = Prime 2 = Non-Prime Merchandise NARRATIVE: If subject merchandise is classified as non-prime, please explain the basis for this classification. AST’s Response to Section B of Commerce’s Antidumping Questionnaire (“AST’s Section B Response”) (Sept. 28, 1998), at B-2 (emphasis in original). In the database, AST identified its sales of side-cuts and pup coils as sales of non-prime, or secondary, merchandise. In its narrative it stated: AST tracks sales of non-prime and prime merchandise in the ordinary course of business. Non-prime merchandise is merchandise that cannot be sold as prime material. For example, non-prime merchandise includes products with a surface defect or other physical defect that precludes the merchandise from being used for its intended application. Moreover, non-prime material is sold exclusively from stock and carries no surface finish warranty, thereby further differentiating between prime and non-prime material. AST’s customers purchase non-prime materials “as is” with respect to surface finish, and a non-prime designation is included in the customer invoice. AST’s Section B Response at B-2 — B-3. (Sept. 28, 1998). On October 23, 1998, Commerce issued a Supplemental questionnaire in which it requested that “[f]or your U.S. and home market sales listings, please create a separate computer field that identifies the specific reason why each sale was designated non-prime merchandise.” Commerce’s Supplemental Section B questionnaire (Oct. 23, 1998) at 7. AST failed to fully respond to the question. It generally described side cuts and pup coils, AST’s Supplemental Section B Questionnaire Response at S-17 — S-18, and provided explanations on some of the individual sales, id. at ex. 18 at 50, but did not fully “identify] the specific reason why each sale was designated non-prime merchandise.” Commerce issued a Second Supplemental Questionnaire in which the first question stated: As previously requested in question 6 of the first supplemental questionnaire, please create a computer field that identifies the specific reason why each sale was designated non-prime merchandise. The information reported in response to this question is insufficient to determine which of these sales are sales of non-prime merchandise. Please state, on a transaction specific basis, which side cuts and pup-coils are non-prime and the reason why each is considered non-prime merchandise (i.e. defective). Commerce’s Second Supplemental Questionnaire at 1 (Dec. 7, 1998). AST’s response reads: With regard to side-cuts and pup coils, the classification was intended to convey that all reported sales of side-cuts and pup coils are appropriately treated as non-prime material. Therefore, there is no need to provide a transaction-specific explanation for such classifications. AST’s Response to Second Supplemental Questionnaire at SC3-2 (December 28, 1998) (emphasis in original). In its Final Determination Commerce stated: [T]he Department defines non-prime (or secondary merchandise) as “steel which has suffered some defect during the production process, or at any time before delivery to the customer.” In its submissions to the Department, AST identified side-cuts and pup coils as secondary merchandise, but did not identify the physical defect or damage associated with each sale of pup coils and side-cuts, as specifically requested by the Department. Final Determination at 30766 (citations omitted). Commerce therefore “determine[d] that side-cuts and pup coils be considered prime merchandise for the final determination.” Id. at 30767. D Commerce Disregarded AST’s Below Cost Sales, Finding That the Sales Were Made at Prices That Did Not Allow Recovery of its Costs. 19 U.S.C. § 1677b(a) provides in part that “[i]n determining under this subtitle whether subject merchandise is being, or is likely to be, sold at less than fair value, a fair comparison shall be made between the export price or constructed export price and normal value.” 19 U.S.C. § 1677b(b) then provides in relevant part: Whenever the administering authority has reasonable grounds to believe or suspect that sales of the foreign like product under consideration for the determination of normal value have been made at prices which represent less than the cost of production of that product, the administering authority shall determine whether, in fact, such sales were made at less than the cost of production. If that administering authority determines that sales made at less than the cost of production - (A) have been made within an extended period of time in substantial quantities, and (B) were not at prices tuhich permit recovery of all costs within a reasonable period of time, such sales may be disregarded in the determination of normal value. 19 U.S.C. § 1677b(b)(l) (1994) (emphasis added). Using the first prong, Commerce found that “[w]here 20 percent or more of a respondent’s sales of a given product during the POI were at prices less than the COP, we determined such sales to have been made in ‘substantial quantities.’ ” Final Determination at 30754. This finding is not in dispute. In order to determine under the second prong if any of the relevant sales were made at prices that provided for recovery of costs within a reasonable time, Commerce applied 19 U.S.C. § 1677b(b)(2)(D), which provides: If prices which are below the per unit cost of production at the time of sale are above the weighted average per unit cost of production for the period of investigation or review, such prices shall be considered to provide for recovery of costs within a reasonable period of time. 19 U.S.C. § 1677b(b)(2)(D) (1994). Commerce found that the statute “is explicit in providing that prices shall be considered to provide for recovery of costs within a reasonable period of time if such prices which are below cost at the time of sale are above the weighted-average per-unit cost of production for the period of investigation.” Final Determination at 30772. It “compared prices to weighted-average COPs for the POI” and “determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time”. Id. at 30754. Therefore, Commerce “disregarded the below-cost sales.” Id. at 30755. E Commerce Applied Adjustments Reported in the REBATE2H Field as Direct Deductions from Home Market Price. In the Final Determination, Commerce applied adjustments reported by AST in the field REBATE2H in its U.S. sales database as direct deductions from the home market price. Final Determination at 30768. In so doing, it stated: We agree with respondents that RE-BATE2H is more properly considered as price adjustments rather than rebates, and that the expenses are appropriately deducted from the home market price. At verification, we reviewed substantial information to conclude that REBATE2H consisted of after-sale price adjustments. Id. To allow for the lag period that exists between the time a sale is made and the time the price adjustment is made, AST adjusted the time period reported in the REBATE2H field by two months, with the period covered in REBATE2H beginning two months after the beginning of the POI, and ending two months after the close of the POI. Commerce “determine[d] that AST’s methodology for reporting credit notes ... is reasonable, as there is no evidence on the record which contradicts AST’s claim regarding a two-month lag period, and there is no reason to believe that respondent’s methodology is in any way distortive.” Id. F Commerce Added Insurance Revenues as Direct Additions to AST’s U.S. Sales Price. In the Final Determination, Commerce added insurance revenue received by AST to its U.S. sales price. In its November 12, 1998 questionnaire response, AST reported insurance claims on a transaction-specific basis. Verification Report of AST USA at 2-3; see also Final Determination at 30769. At the beginning of verification, AST submitted to Commerce evidence of an additional insurance claim not previously reported to Commerce. The revenue from that claim was received during the POI. This revenue was not reported on a transaction-specific basis, see Memorandum To File, March 25, 1999, from Lesley Stagliano, Case Analyst, at 2-3, and Commerce “verified [the] fact that AST was unable to tie this insurance revenue to specific transactions.” Final Determination at 30770. Unlike the data relating to the additional sales presented to and rejected by Commerce at verification, Commerce accepted this new insurance claim information. In the Final Determination, Commerce “considered] this additional insurance revenue to be directly applicable to all sales of subject merchandise, because in the absence of these sales, the claim would not have been made, and the revenue would not have been received.” Id. at 30769-70. Therefore, “[f]or purposes of the final determination, [Commerce] allocated this additional insurance revenue over all sales of subject merchandise.” Id. at 30770. Ill STANDARD OF REVIEW The court has jurisdiction under 28 U.S.C. § 1581(c) (1994). The court will uphold Commerce’s determination in an antidumping investigation unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(l)(B)(i) (1994). Substantial evidence is something more than a “mere scintilla,” and must be enough evidence to reasonably support a conclusion. Primary Steel, Inc. v. United States, 17 CIT 1080, 1085, 834 F.Supp. 1374, 1380 (1993); Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987). IV ANALYSIS A Substantial Record Evidence Supports Commerce’s Decision to Reject USR’s Database and to Apply Total Facts Available to the Downstream Sales of USR. 19 U.S.C. § 1677e(a) provides that if a party “withholds information that has been requested by the administering authority” or “provides such information but the information cannot be verified,” Commerce “shall ... use the facts otherwise available in reaching the applicable determination under this title.” 19 U.S.C. § 1677e(a) (1994). Section 1677m(e) provides that: [i]n reaching [its] determination ... the administering authority ... shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority .. •, if (1) the information is submitted by the deadline established for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the administering authority or the Commission with respect to the information, and (5) the information can be used without undue difficulties. Section 1677m also provides, in relevant part, that if a response is deficient, Commerce “shall promptly inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person with an opportunity to remedy or explain the deficiency in light of the time limits established for the completion of investigations or reviews under this title.” 19 U.S.C. § 1677m(d) (1994). As discussed above, Commerce found pervasive errors in USR’s data at verification. It found that these errors (unattributed sales and misallocation of processing costs, buffing costs, quantity surcharges and respinning costs) undermined the credibility of the database as a whole. AST claims that the errors in USR’s database should be disregarded. Specifically, it states that “[notwithstanding Commerce’s assertion that these errors undermined the integrity of USR’s data, even taken at their most adverse, the cited errors were confined to the processing portion (PROCESS) — representing [ ] % of U.S. price — of the total reported further manufacturing cost (FURMANU2). Finally, as explained below, these purportedly serious errors either were not errors, or were insignificant in the aggregate and/or easily correctable; none of the errors undermines the general integrity of USR’s response as a whole.” Plaintiffs’ Motion for Judgment Upon the Agency Record Under USCIT R. 56.2 (“AST’s Motion”) at 7 (footnotes and punctuation omitted). AST also argues that Commerce did not identify any “significant discrepancies or problems in USR’s sales data” in its Verification Report, yet “nevertheless asserted that certain isolated errors rendered the entire USR database — including the verified U.S. sales, data and other adjustments — unusable.” Id. at 6. It individually attacks the errors found by Commerce. 1 The Errors Identified by Commerce Constitute Substantial Evidence Supporting the Application of Total Facts Available. As to the unattributed sales, AST claims that “USR undertook to comply with Commerce’s request [for the source of coil of sold products on a sale-by-sale basis] by creating a computer program that was able to match most, but not all, sales to their source coil.” Id. at 7 (footnotes omitted). AST then argues that “[i]n similar situations, including its investigations of other steel service centers, Commerce has not rejected the underlying submissions, but instead has adopted a reasonable allocation methodology for sales of unattributed origin.” Id. at 8. AST cites Certain Cut-to-Length Carbon Steel Plate from Sweden, 60 Fed.Reg. 48502 (Dep’t Commerce) (1995) (Prelim.Results) (“Steel Plate from Sweden”) as an example to support its statement. In that case, however, Commerce verified that the distributor “could not identify the supplying producer for sales to unrelated customers.” Steel Plate from Sweden at 48503 (emphasis added). It also verified that the price of the product was “set without regard to the supplying producer.” Id. Commerce verified that the distributor “accurately reported most of its expenses and adjustments,” and therefore used its sales listing. Id. This case is different. Commerce “found that [USR] could have supplied the Department with the supplier names for these unattributed sales.” Final Determination at 30760 (emphasis added). It was unable to verify a large portion of the information it sampled from USR’s database, and it determined that the database as a whole was unreliable. Id. at 30760-61. Commerce’s actions in Steel Plate from Sweden do not contradict its actions here. AST claims that “[a]ny misallocation of processing costs to products that underwent no further processing was immaterial.” AST’s Motion at 9. It says “[a]t verification Commerce found only a single sale of unprocessed material that had been allocated processing costs, and that sale did not involve a sale of AST material .... [and that] the allocation of minor processing costs to unprocessed material were not biased so as to result in a reduction in the margin.” Id. (footnotes omitted) (emphasis in original). Furthermore, it argues that “Commerce bases its U.S. price calculation on average — rather than transaction-specific — prices and adjustments, thereby reducing the importance of transaction-specific data in the proceedings. Thus, any overstatement of further processing costs for one sale and understatement for another sale is of little if any consequence”. Id. at 9-10 (footnotes omitted). Therefore, AST concludes that “[t]he record does not support Commerce’s assertion that ‘several of these errors served to understate the costs of further processing by shifting portions of these costs to non-further-proeessed merchandise.’ ” Id. at 9 (quoting Final Determination at 30759). Commerce, however, found errors in seven of the eighteen transactions it sampled at verification. Final Determination at 30759 (“[0]ur testing at verification revealed that costs for three of the nine selected transactions were in error. When the Department then selected nine additional transactions for review, four of these were found to contain errors.”). The errors to which Commerce refers were: in either the allocation of processing costs or in the matching of input coils to output coils. In two of these cases [USR] had assigned processing costs to products which had, in fact, undergone no processing whatever. We note that this discrepancy arose from the input coils and output coils identified by [USR]’s own computer program. In another transaction the combined widths of the finished products were greater than the original width of the input coil as identified by the system, an obvious physical impossibility that should have been identified by [USR] as an error. Id. Although AST is correct that the Department “bases its U.S. price calculations on average ... prices and adjustments”, AST’s Motion at 9, the average is inaccurate if the numbers averaged are inaccurate. In addition, as Commerce argued at oral argument, AST certified on each of its questionnaire responses that the data submitted was correct, but at verification Commerce found that much of the data was incorrect. The cumulative effect of averaging cannot cure the inaccuracies discovered. Therefore, AST’s misallocation of processing costs is material to Commerce’s determination and is appropriate for Commerce to consider. AST argues that errors regarding buffing costs and quantity surcharges could have been corrected by Commerce, and that respinning costs were not separately identifiable, but the total costs were included, so Commerce should not have used errors in reporting them as evidence in its facts available analysis. See AST’s Motion at 10-12. a Commerce Was Not Obligated to Correct AST’s Errors in its Reported Buffing Costs. As to buffing costs, AST argues that “[o]f the [ ] USR reported sales ... attributed to AST, only [ ] sales — accounting for only [ ] % by volume — had a misapplied buffing cost, and each of these sales was identified to, and verified by, the Commerce verifiers. Thus, the few transactions for which the pre-buffing cost was misapplied could be corrected easily.” Id. at 10 (footnotes omitted). The relation of a particular error to any particular volume of sales is here impertinent. Based on the aggregated series of errors found at verification, Commerce concluded that the database was too unreliable to use. Misapplied pre-buffing costs are part of the evidence supporting that conclusion. In fact, Commerce located at least some of the misapplied pre-buffing allocations at verification. However, Commerce is not necessarily obligated to correct errors. As this court explained in Yamaha Motor Co., Ltd. v. United States: It is the respondent’s obligation to supply Commerce with accurate information. While Commerce may have had the information to recalculate Yamaha’s selling expenses to correct the overstatement, the court has stated that respondents “must submit accurate data” and “cannot expect Commerce, with its limited resources to serve as a surrogate to guarantee the correctness of submissions.” In general, Commerce is not required to correct a respondent’s errors when erroneous data is reported and not timely corrected. Yamaha Motor Co., Ltd. v. United States, 19 CIT 1349, 1359, 910 F.Supp. 679, 687 (1995) (citations omitted); see also NSK, Ltd. and NSK Corp. v. United States, 17 CIT 590, 825 F.Supp. 315 (1993) (when the error is not obvious from the record, Commerce has no duty to correct it or allow for untimely filing of corrected data). There are circumstances under which Commerce is required to correct or allow correction of clerical errors. In Tehnoim-portexport v. United States, 15 CIT 250, 258-59, 766 F.Supp. 1169, 1178 (1991), this court held that as to clerical errors, “if the error was so egregious and so obvious that the failure to correct it was an abuse of discretion and undermined the interests of justice, the Court may remand the case to [Commerce] for adjustment of the calculations.” See also NTN Bearing Corp. v. United States, 74 F.3d 1204 (Fed.Cir.1995) (Commerce’s refusal to consider correction of clerical errors based upon the correction being an “untimely submission” is an abuse of discretion). However, clerical errors are distinguished from substantive errors, see World Finer Foods, Inc. v. United States, 2000 WL 897752 at *7 (CIT 2000), and result from inaccurate copying or duplication, or other similar unintentional errors, see 19 C.F.R. § 351.224(f) (1999). Here, AST’s inaccurate reporting of data is a substantive error, not a clerical one. The error was in the data reported by AST, not in copying records or recording data. Since the obligation for reporting accurate data falls on AST, and Commerce was not obligated to correct the errors made by AST in reporting its buffing costs, AST’s contention that the errors were “easily correctable” and therefore not appropriate evidence of its noncooperation fails. b Commerce Was Not Obligated to Correct AST’s Errors in its Reported Quantity Surcharges. AST again argues that Commerce could have corrected AST’s own mistakes about quantity surcharges. It admits that “[t]he surcharge for USR’s small-volume sales should have been reported as [ ] % of total reported further manufacturing costs, or a price adjustment of [ ] %.” AST’s Motion at 11 (punctuation omitted). It claims, however, that “Commerce verified the correct amount of the quantity surcharge adjustment that should have been applied, as well as the quantities to which this adjustment should have been applied. As such, USR’s reported further manufacturing cost easily could be adjusted to account for the misapplied quantity surcharges.” Id. at 11-12 (footnotes omitted). As stated above, Commerce is not obligated to correct mistakes made by the respondent except in some circumstances of clerical errors. Yamaha Motor Co., Ltd., 910 F.Supp. at 687; Tehnoimportexport and Peer Bearing Co. v. U.S., 15 CIT 250, 766 F.Supp. 1169; NTN Bearing Corp., 74 F.3d 1204. Therefore, its ability to correct the mistakes does not mean either that it had to do so, nor that the mistakes could not be used as evidence in Commerce’s determination that application of total facts available was appropriate. To so hold would be to “shift [the respondent’s] burden to Commerce due to [the respondent’s] own carelessness.” NSK, Ltd., 17 CIT at 593, 825 F.Supp. at 319. c Errors in Reported Respinning Costs are Appropriate Evidence for Commerce to Consider in Making its Total Facts Available Determination. Finally, AST claims that although Commerce requested respinning costs, which are part of processing costs, they could not be separately reported because they are not separately identifiable. AST’s Motion at 10. AST argues that “these expenses— which are common to all processed material — were included in the reported total costs.” Id. However, whether the final number was included or not, the discrepancy, or as Commerce termed it, the “obvious physical impossibility,” of the input coil being narrower than the combined widths of the final products was certainly a legitimate concern for Commerce to raise. The mismatching of the coils called into question the reliability of the processing costs allocation. Since the input and output coils were not properly matched, it was impossible for the costs allocated by AST to the individual coils to be correct. Particularly in light of the numerous other errors found by Commerce at verification, the discrepancies in the reported respinning costs are reasonable evidence for Commerce to rely upon in its finding that the database was unreliable. The evidence identified by Commerce fulfills the standard of substantial record evidence in support of its rejection of USR’s database. It is “enough [evidence] to reasonably support [the] conclusion” that the database was unreliable and unusable. See Primary Steel, 17 CIT at 1085, 834 F.Supp. at 1380 (quoting, Ceramica Regiomontana, S.A., 10 CIT at 405, 636 F. Supp at 966). 2 AST’s Argument That Commerce Should Have Given it an Opportunity to Correct or Explain the Errors Fails Because the Pervasive Errors Were Discovered at Yerification. AST argues that Commerce should have given it an opportunity to correct or explain the errors found. AST’s Motion at 12. It cites to 19 U.S.C. § 1677m(d), which states in relevant part that: If the administering authority ... determines that a response to a request for information under this title does not comply with the request, the administering authority ... shall promptly inform the person submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that person with an opportunity to remedy or explain the deficiency in light of the time limits established for the completion of investigations or reviews under this title. 19 U.S.C. § 1677m(d) (emphasis added). Subsection (e) of the same statute states that: In reaching a determination under section ... 1675 ... of this title the administering authority and the Commission shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority or the Commission, if- (1) the information is submitted by the deadline established for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the administering authority or the Commission with respect to the information, and (5) the information can be used without undue difficulties. 19 U.S.C. § 1677m(e) (1994) (emphasis added). AST says that “[i]f in fact Commerce believed that these problems rendered the submissions deficient or unusable, it was obligated promptly to inform AST and USR of the nature of the deficiency and to afford AST and USR ‘an opportunity to remedy or explain the deficiency in light of the time limits established for completion of investigations....”’ AST’s Motion at 12. Since Commerce did not issue supplemental questionnaires or specifically mention these problems in the verification agendas, and “it conducted verifications of USR’s database”, it argues that “Commerce did not perceive these previously disclosed problems as rendering the database inherently unusable.” Id. The argument misconstrues the statute. The issue is not whether Commerce found the database inherently unusable, but rather if it was in fact unusable. Commerce found that the pervasive errors rendered it actually unusable, Final Determination at 30759, and it discovered the pervasive nature of the errors at verification. Since Commerce could not have known that the errors rendered the database unusable prior to verification, it was impracticable for it to issue supplemental questionnaires or verification agendas addressing the errors. Under the statutes previously quoted, Commerce was under no obligation to request corrected submissions from AST after the errors were discovered at verification. AST had a statutory obligation to prepare an accurate and complete record in response to questions plainly asked. See Yamaha Motor Co., Ltd., 910 F.Supp. at 687; see also Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1571-72 (Fed.Cir.1990). The database information was clearly requested, and AST failed to provide complete, accurate responses. The errors here were pervasive, and undiscovered before verification, which rendered impracticable correction by AST of its submissions. The “time remaining for completion of the investigation” was 72 days. Commerce stated its justification for not allowing correction of the data. It said: The fact remains unchallenged that for two days of a scheduled three-day verification we tested a number of further manufactured transactions to assess the reliability of [USR]’s methodology for reporting costs and discovered numerous errors. [USR] claimed on the last day of verification that it had reviewed its further-manufacturing data and isolated the magnitude of these errors. AST’s assertion that [USR] succeeded in identifying all of the errors is unsubstantiated, and could not be verified in the time remaining. The only way to test this eleventh-hour claim would have been to re-verify the entire further-manufacturing database.... We consider it inappropriate for respondents to expect the Department to retest the entire further manufacturing database on the last day of verification after the Department uncovers numerous errors as a result of its routine testing. Furthermore, the requirements of section 782(d) that the Department provide a respondent the opportunity to remedy such errors is inapplicable. Rather, as we stated in Certain Cuir-to-Length Carbon Steel Plate from Sweden, [w]e believe [respondent] SSAB has misconstrued the notice provisions of section 782(d) of the [Tariff] Act. Specifically, we find SSAB’s arguments that the Department was required to notify it and provide an opportunity to remedy its verification failure are unsupported. The provisions of section 782(d) apply to instances where “a response to a request for information” does not comply with the request. Thus, after reviewing a questionnaire response, the Department will provide a respondent with notices of deficiencies in that response. However, after the Department’s verifiers find that a response cannot be verified, the statute does not require, nor even suggest, that the Department provide the respondent with an opportunity to submit another response. Certain Cut-to-Length Carbon Steel Plate from Sweden, 62 Fed.Reg. 18396, 18401, April 15, 1997. In this case a partial correction is not a viable option, because of both the high percentage of errors found through our sample testing and the fact that some of the errors cannot be corrected with information on the record. Final Determination at 30759-60 (emphasis added). AST “also dispute[s] Commerce’s contention that USR’s efforts to correct the problems with the cost database ‘could not be verified in the time remaining’ at verification.” AST’s Motion at 13 (footnotes omitted). It argues: In fact, by their conduct the verifiers indicated that these data had been verified. At the start of the third day of the cost verification USR gave the verifiers a complete description of the programming errors and a list of the problematic transactions. The verifiers accepted the documentation, reviewed it, asked company officials questions about it, and then incorporated it into the record of this proceeding. The verifiers then proceeded with and completed the rest of the verification ahead of schedule, in fact changing their travel plans to take an earlier flight home. Id. (footnotes omitted) (emphasis in original). Identification of errors and problems does not necessarily produce corrected data. Rather, it gives rise to an opportunity to correct; an opportunity not taken by AST. That the verifiers left earlier than planned does not necessarily indicate anything. Various conclusions can be drawn from an early departure; one is that the data was so useless that there was no point in staying. The court is in no position to make any inferences. The terms of 19 U.S.C. § 1677m(e) do not obligate Commerce to permit a remedial response by AST. All five criteria enumerated in that section must be met before its provisions apply. See 19 U.S.C. § 1677m(e) (1994). The information submitted by AST could not be verified. Final Determination at 30758-59. Without the need to analyze the other four criteria, the database prepared by USR does not fulfill the criteria of § 1677m(e), and Commerce did not have to give AST and USR an opportunity to submit corrected data after verification. 3 Commerce’s Application of Adverse Facts Available Was Proper Because its Determination That AST Did Not Cooperate to the Best of its Ability Is Supported by Substantial Record Evidence and in Accordance with Law. In addition to facts available, if Commerce finds that the respondent did not cooperate to the best of its ability, it can apply an adverse inference. The statute provides: If the administering authority ... finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority ..., the administering authority ..., in reaching the applicable determination under this subtitle, may use an inference that is adverse to the interests of that party in selecting from among facts otherwise available. 19 U.S.C. § 1677e(b) (1994). See also Mannesmannrohren-Werke AG v. United States, 77 F.Supp.2d 1302, 1313 (CIT 1999) (“Mannesmann J”) (“Once Commerce determines that use of facts available is warranted, 19 U.S.C. § 1677e(b) (1994) further permits Commerce to apply an adverse inference if it makes the additional finding that ‘an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information.’ ”); Ferro Union, Inc. v. United States, 44 F.Supp.2d 1310, 1330 (CIT 1999) (Before applying an adverse inference, Commerce must find “that a respondent could have complied, and failed to do so.”). Commerce found that the errors it discovered in USR’s database showed that AST had not cooperated fully because it did not respond to the best of its ability. It said: [N]ot only do such fundamental errors as found at verification raise concerns as to the validity of the data not directly tested, but they also demonstrate that the respondent failed to act to the best of its ability to report such information. Indeed, a reasonable check by company officials could have shown that (1) products that underwent no further processing were being assigned further-processing costs, (2) further-processed products were not being assigned further-processing costs, (3) coils passing through certain processes were not being allocated any cost for the process, and (4) the output width of slit coils generated by a given master coil exceeded the original width of that input coil. ... As discussed above, we find that AST, as the respondent, did not cooperate by failing to comply to the best of its ability to provide the CEP information requested by the Department.... With respect to the unattributed downstream sales reported by [USR], we determine, pursuant to section 776(a) of the Act, that it is appropriate to apply facts otherwise available to these sales, because these sales were unverifiable.... At verification, toe found that [USR] could have supplied the Department with the supplier names for these unattributed sales.... Therefore, we determine that pursuant to section 776(b), the use of adverse facts available is appropriate for the entirety of the data submitted by [USR]. Final Determination at 30760 (emphasis added). Record evidence supports the conclusion that AST did not cooperate to the best of its ability. The errors described by Commerce and reviewed by the court in its determination that application of total facts available was appropriate were widespread. At verification Commerce was able to identify many of the errors using only the information available to AST and USR. “The first step identified in the Department’s verification agenda calls for the respondent, at the outset of verification, to present any errors or corrections found during its preparation for the verification. None of the errors discussed here were presented by [USR] at the outset of verification.” Final Determination at 30759. Had AST checked the data submitted, it could have identified errors and corrected them. It did not. AST analogizes this case to Color Picture Tubes from Japan, and argues that “[t]he mere existence of errors or omissions in a party’s responses is not evidence of a purposeful failure to cooperate”. AST’s Motion at 18 (footnotes omitted). In that case, Commerce stated: Given the level of cooperation by Mitsubishi, including timely submission of its initial and supplemental questionnaire responses as well as its participation in a verification of its data, the absence of CV data for these sales does not warrant the use of adverse facts available pursuant to section 776(b). On the contrary, for more than 98 percent of its U.S. sales of subject merchandise during the POR [period of review] Mitsubishi provided information such that we are able to calculate an accurate margin. For the relatively few sales for which we had no CV data we exercised our discretion under section 776(a) to determine how to apply facts available to account for the missing data. Color Picture Tubes From Japan; Final Results of Antidumping Administrative Review, 62 Fed.Reg. 34201, 34209 (Dep’t Commerce 1997) (emphasis added). Color Picture Tubes From Japan is simply not analogous. AST was not particularly cooperative, and the data it submitted was unreliable and unusable. That is not the Color Picture Tubes from Japan situation, where data on 93% of the sales was provided. The requirement that Commerce find the respondent did not comply “to the best of its ability” at least implies a duty on the respondent to make its response reasonably accurate. Where the relevant information was available to the respondent, its failure to use the information and accurately report the data requested by Commerce is evidence of its failure to meet the standard. Commerce’s application of the adverse inference of 19 U.S.C. § 1677e(b) is thus supported by substantial record evidence and in accordance with law. 4 Commerce’s Choice of Adverse Facts Available Is Remanded as It is Unsupported by Substantial Record Evidence and Not in Accordance with Law Because Commerce Failed to Subtract Expenses from the U.S. Sales Before Applying the Margin. Commerce is given wide latitude to select the facts applied. As this court stated in Mannesmann I, “the ultimate choice of facts available is a matter largely reserved to Commerce’s discretion.” Mannesmann I, 77 F.Supp.2d at 1325 n. 13 (citing, Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185, 1191 (Fed.Cir.1993) “(recognizing that, as Congress did not explicitly define what constitutes BIA (now facts otherwise available), Commerce’s ‘construction of the [BIA] statute must be accorded considerable deference’).”). Commerce’s discretion is not unfettered, as discussed in Mannesmannrohren-Werke AG v. United States, 120 F.Supp.2d 1075 (CIT 2000) (“Mannesmann II"), where this court states: In F. LLI De Ceceo, the CIT had held the figure Commerce applied as adverse facts available was “thoroughly discredited and uncorroborated.” F. LLI De Ceceo, 216 F.3d at 1030 (quotations omitted). The Federal Circuit affirmed, noting that although “it is within Commerce’s discretion to choose which sources and facts it will rely on to support an adverse inference when a respondent has been shown to be uncooperative ... Commerce’s discretion in these matters ... is not unbounded.” “Id. at 1032.” It goes on to say that it is not to choose a huge amount that is totally unrelated to the actual amount, but it is to have a certain amount added as a deterrent. Mannesmann II at 1087 n. 4. Commerce is guided in its choice of adverse facts available by statute. 19 U.S.C. § 1677e(b) (1994) gives a nonexclusive list of sources of the adverse facts that Commerce may apply. It states, in relevant part: Such adverse inference may include reliance on information derived from - (1) the petition, (2) a final determination in the investigation under this subtitle, (3) any previous review under section 1675 of this title or determination under section 1675b of this title, or (4) any other information placed on the record. 19 U.S.C. § 1677e(b) (1994). In this case Commerce stated: As adverse facts available, we have assigned the highest non-aberrational margin calculated for this final determination to the weighted-average unit value for sales reported by [USR]. To determine the highest non-aberrational margin we examined the frequency distribution of the margins calculated from AST’s reported data. We found that roughly 28 percent of AST’s transactions fell within a reasonably narrow range of 20 to 29 percent; we selected the highest of these as reflecting the highest non-aberrational margin. Further detail on our selection of the facts-available margin is contained in the Analysis Memorandum. We then multiplied the resulting unit margin by the total quantity of resales of subject merchandise by [USRJ. This total quantity includes that material affirmatively verified as being of AST origin, as well as a portion of the merchandise of unidentified origin allocated to AST. Since we are relying on verified data for use as adverse facts available for these unattributed sales, corroboration under 776(c) is not necessary. Final Determination at 30760 (citations omitted) (emphasis added). AST claims that “the adverse [facts available] that Commerce chose to apply in this case are inconsistent with its legal obligations and past practices in similar situations.” AST’s Motion at 23. Specifically it argues that Commerce “failed to deduct any of USR’s and AST USA’s verified expenses,” those being “AST USA’s further manufacturing costs, movement expenses, circumstance-of-sale adjustments, indirect selling expenses, and packing costs.” Id. at 24-25 (footnotes omitted). It argues that Commerce cannot reject verified information in favor of less probative data. In support it cites National Steel Corp. v. United States, 20 CIT 100, 913 F.Supp. 593 (1996) (“National Steel II”), in which the court stated that “Commerce’s actions may be unreasonable if ‘the agency ... [has] ... rejected] low margin information in favor of high margin information’ that was demonstrably less probative ...” National Steel II at 103, 596 (quoting Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190 (Fed.Cir.1990)) (alterations in original). AST also claims that by not adjusting the gross selling price to reflect the deductions, Commerce distorted the intended results of its calculations. AST’s Motion at 25. It argues: Commerce’s use of an unadjusted gross selling price as the basis for calculating the [facts available] margin is inherently distortive and unreasonable. The surrogate percentage margin applied to the USR sales — the highest allegedly “non-aberrant” margin calculated with respect to AST’s other U.S. sales — was itself calculated by multiplying the margin of dumping on those sales by the adjusted net U.S. price of the U.S. sales in question. Thus, the surrogate percentage margin that Commerce applied was an adverse measure of USR’s dumping margin expressed in terms of net — not gross — U.S. prices. Commerce’s subsequent application of this surrogate margin to the average gross price of USR’s sales therefore • mixed “apples and oranges,” distorting the intended results. There is no plausible justification for this approach. Id. The Government contends that Commerce did include deductions for movement and selling expenses, because such deductions are part of the calculated margin. Defendant’s Response to Plaintiffs’ Motion at 17. It cites to the Preliminary Results, in which Commerce stated: We calculated CEP, in accordance with subsections 772(b) of the Act ... We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, freight equalization charges, foreign inland freight, marine insurance, U.S. customs duties, U.S. inland freight, foreign brokerage and handling, international freight, foreign inland insurance, and U.S. warehousing expenses. In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (credit costs, warranty expenses and technical selling expenses), inventory carrying costs, and indirect selling expenses. Preliminary Results, 64 Fed.Reg. at 121 (emphasis added). Since “[a] calculated margin already accounts for deductions for movement and selling expenses”, the Government argues, “AST’s reliance on National Steel II is misplaced.” Defendant’s Response to Plaintiffs’ Motion at 17. However, AST claims that this argument actually supports its own position. It argues: As Defendant now concedes, the [facts available] percentage margin applied to the USR sales was calculated on the basis of, and expressed as, a percentage of U.S. prices that are net of movement and selling expenses. Accordingly, to maintain consistency, this percentage margin should have been applied to a USR price that likewise was net of movement and selling expenses. To apply this percentage — as Commerce did in this case — to a gross price that includes additional movement expenses, selling expenses, and further-manufacturing expenses arbitrarily inflates and distorts the resulting dumping calculation by this difference. AST’s Reply at 11 (emphasis in original). Commerce calculated a margin from net sales and applied it to gross sales. The apparent inclusion of movement and selling expenses would distort the final calculation. Although “Commerce is in the best position, based on its expert knowledge of the market and the individual respondent, to select adverse facts that will create the proper deterrent to non-cooperation with its investigations and assure a reasonable margin”, it may not impose that margin in such a way as to distort the intended result or to result in the imposition of “punitive, aberrational, or uncorroborated margins.” F. LLI De Cecco, 216 F.3d at 1032. Since Commerce’s application of adverse facts available is unsupported by substantial record evidence, it is not in accordance with law. The Final Determination is remanded to Commerce to apply its adverse facts available margin to U.S. sales net of verified expenses. B Commerce’s Application of Adverse Facts Available to AST’s Additional U.S. Sales Is Supported by Substantial Record Evidence and in Accordance with Law. Commerce rejected AST’s belated attempts to introduce data on 84 U.S. sales that had been omitted from its questionnaire responses. The sales comprised [ ] of the total U.S. sales volume. See Defendant’s Response to Plaintiffs’ Motion at 21. Having rejected the data as an untimely questionnaire response, Commerce applied facts available. Finding that AST had not cooperated to the best of its ability, Commerce applied an adverse inference. Final Determination at 30757. 1 Substantial Record Evidence Supports Commerce’s Rejection of the Additional Sales. AST claims that Commerce was not justified in rejecting its additional sales data. See AST’s Motion at 13-17 (“Commerce’s decision to reject the Additional Sales is not supported by substantial evidence on the record or otherwise in accordance with law.”). However, as the court stated in its earlier opinion on AST’s Motion to Expand the Administrative Record, “The additional sales data was returned to AST as an untimely questionnaire response.” Acciai Speciali Terni S.p.A. v. United States, 120 F.Supp.2d 1101, 1102 (“Acciai I”) (citing Final Determination at 30757 n. 6 (“We subsequently rejected other attempts that AST made to submit this information, pursuant to section 351.302(d) of the Department’s regulations, because it was untimely filed.”).). As earlier noted, “Commerce had no statutory obligation to include rejected documents in the administrative record, and no similar materials were included in the record.” Id. at 1104