CIT Again Remands Scope Ruling on Curtain Wall Units to Consider 'Subassemblies' Test for Aluminum Extrusions Duties
The Court of International Trade on Oct. 6 (here) again rejected a Commerce Department scope ruling on whether curtain wall units, imported separately but under the same order, are subject to antidumping and countervailing duties on aluminum extrusions from China (A-570-967/C-570-968). Though Commerce had already reversed its initial scope ruling and found the curtain wall units are exempt, CIT took issue with the logic behind the agency’s revised ruling, especially Commerce’s narrowing of duty exemptions for subassemblies under the aluminum extrusions orders.
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Commerce originally found Yuanda’s curtain wall units are subject to duties in 2014 (see 14033128). CIT had several months earlier found curtain wall units are generally subject to aluminum extrusions duties because they are parts of larger curtain walls, and parts are generally covered by the 2011 AD/CVD orders (see 14013101). The U.S. Court of Appeals for the Federal Circuit affirmed the ruling one year later (see 1501210063).
In the meantime, however, Commerce began letting “subassemblies” of larger finished products qualify for the finished goods kit and finished merchandise exemptions from aluminum extrusions duties. Under the new test, any finished good, either fully assembled or shipped in pieces as a kit, capable of installation in the ultimate downstream product upon importation without any further finishing or fabrication, may be exempt. In February, CIT ordered Commerce to reconsider its 2014 scope ruling on Yuanda curtain wall units, given the new test for subassemblies (see 1602110057).
Though Commerce reversed in response to the February decision and found Yuanda’s curtain wall units are exempt, it did so based on faulty logic, CIT said. Commerce found the units are not subassemblies because they are not finished merchandise or finished goods kits -- in this case, the finished merchandise is the complete curtain wall. But that defeats the entire purpose of the subassembly test, which should allow for subcomponents to qualify for duty exemptions even if they aren’t the final finished products, CIT said. Instead, based on its own prior application of the subassemblies test, Commerce should have first considered whether the curtain wall units are a subassembly, and then consider whether they require “further ‘finishing’ or ‘fabrication’ prior to assembly, contain all the necessary hardware and components for assembly, and are ready for installation at the time of entry,” CIT said.
(Shenyang Yuanda Alum. Indus. Eng'g Co. v. U.S., Slip Op. # 16-94, CIT # 14-00106, dated 10/06/16, Judge Pogue)