CIT Orders ITA to Justify Use of Bad Debt in Indian Shrimp AD Expenses
In the February 2008 - January 2009 AD administrative review of certain frozen warmwater shrimp from India, the International Trade Administration chose to include in the selling expenses of Indian producer Liberty Group/Liberty Frozen Foods Pvt., Ltd. the full amount of a bad debt the company wrote off during the period of review, although the period included only half the firm’s fiscal year.
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The Court of International Trade ruled that the agency was correct to include bad debt expense in selling expenses, but not to include the full charge. The CIT noted that in another case the ITA had taken an opposite approach and included a bad debt expense in selling expenses on a pro-rated basis. The court ordered the ITA to explain or amend its “arbitrary” decision. (Slip Op. 11-96 dated 08/03/11)