Assembly Process Means Goods Not Subject to Aluminum Extrusions Duties, Says CIT
Assemblies of extruded aluminum parts are not covered by the antidumping and countervailing duty orders on aluminum extrusions from China, said the Court of International Trade in a Feb. 1 decision (here). Finding irrelevant the question of whether assembled appliance door handles qualified for the “finished merchandise” exemption from duties, CIT Chief Judge Timothy Stanceu found assemblies are not included in the scope of duties in the first place because assembly is not one of the post-extrusion processes – drawing, fabricating and finishing – that are allowed by the scope.
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Rubbermaid had requested the underlying scope rulings on two types of appliance door handles. One included screwed-on plastic end caps, and was assembled prior to importation. The other consisted of a single extruded aluminum component imported with screws. Commerce ruled both are subject to duties in a scope ruling issued mid-2014 (see 14080602).
A spate of recent decisions from CIT have taken issue with Commerce’s requirement that exempt “finished merchandise” and “finished goods kits” must include non-extruded aluminum components, besides fasteners. Judge Delissa Ridgway in November 2014 called into question a ruling where Commerce found the “finished merchandise” exemption does not cover wholly extruded aluminum products (see 14080602). More recently, Judge Kenton Musgrave held a different ruling, where Commerce found the “finished goods kit” exemption requires the presence non-extruded aluminum parts, is unsupported by the language of the scope (see 1411280009).
Judge Stanceu’s decision takes CIT’s restrictive application of aluminum extrusions duties one step further. The decision "indicates a narrower view of the scope of the orders, quite apart from the interpretation of the finished merchandise exclusion," said Donald Harrison of Gibson Dunn, who represents Rubbermaid in the case. A lawyer representing the Aluminum Extrusions Fair Trade Committee, a domestic industry group, did not immediately comment.
According to the decision, the scope of the AD and CV duty orders includes goods made from certain aluminum alloys that resulted from an extrusion process, said CIT. It even covers aluminum extrusions that have been subjected to further processing, listing a number of processes that all fall under drawing, fabricating and finishing operations. However, “notably absent” from the post-extrusion processes are assembly operations, said the court. Therefore, the scope cannot be interpreted to cover extrusions that are then subjected to assembly. “In other words,” clarified Stanceu, “extrusions” are defined in the scope “to include goods that have been processed in various ways following an extrusion process, but the term ‘extrusion’ is not defined in the general scope language so as to include a good simply because an extruded aluminum component is present within a good consisting of an assembly.”
Though extruded aluminum parts assembled to form subassemblies are identified in the scope as subject to duties, that only applies to “partially assembled merchandise unless imported as part of the finished goods ‘kit’,” said CIT. Commerce did not argue Rubbermaid’s appliance door handles were partially assembled, just that they did not qualify for the “finished merchandise” exemption, said the decision, which also faulted Commerce’s holding that the end caps on the assembled door handles were “fasteners” that were invisible for the purposes of the exemption. Though it ruled Commerce was correct in finding the unassembled models of door handles are subject to duties, CIT ordered Commerce to reconsider its decision on the assembled door handles, and submit its redetermination within 60 days.
(Whirlpool Corp. v. U.S., Slip Op. 16-08, CIT # 14-00199, dated 02/01/15, Judge Stanceu)