CIT Rejects Commerce's Fastener Test for 'Finished Merchandise' Exemption From Aluminum Extrusions Duties
The Court of International Trade on Dec. 7 struck down another facet of the Commerce Department’s application of an exemption from antidumping and countervailing duties on aluminum extrusions from China (here), finding no basis for disregarding fasteners when determining whether a product meets the “finished merchandise” exemption.
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The court overturned aspects of a 2013 scope ruling on a model of appliance door handles imported by Meridian Products (see 13062703), the same company that successfully challenged Commerce’s interpretation of the “finished goods kit” exemption in June (see 1506240022). The oven door handles at issue comprise an aluminum extrusion with plastic end caps and screws attaching the end caps to the aluminum piece.
Commerce had ruled the oven door handles do not qualify for the “finished merchandise” exemption, and are subject to AD/CV duties, because they consist only of aluminum extrusions. Adopting an interpretation it has since applied consistently over the past two years, Commerce ruled the plastic end caps and screws are fasteners, and should be ignored when determining whether the door handles have any non-extruded aluminum. In Commerce’s eyes, the door handles were the equivalent of a single piece of extruded aluminum, which should be subject to AD/CV duties.
In an opinion written by Chief Judge Timothy Stanceu, CIT found no basis in the scope for Commerce’s interpretation. The finished merchandise exemption applies to “finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry,” said CIT. Unlike the scope’s exemption for “finished goods kits,” which does not allow products to qualify “merely by including fasteners,” the finished merchandise exemption does not mention fasteners at all, said the court. Even if fasteners should be ignored, the end caps on Meridian’s oven door handles are “specialized parts” molded to shape, and not fasteners, it said. CIT gave Commerce 90 days to amend its scope ruling and file it with the court.
(Meridian Prods., LLC v. United States, Slip Op. 15-135, CIT # 13-00246, dated 12/07/15, Judge Stanceu)