Kits Must Be Arranged Before Importation to Qualify for Aluminum Extrusion Duty Exemption, Says CIT
Components repackaged into finished goods kits after importation are not eligible for the finished goods kit exemption from antidumping and countervailing duties on aluminum extrusions from China, said the Court of International Trade in a decision issued April 20 (here). A good to qualifies for the exemption if already packed into kits before importation, even if in separate boxes, but not if the boxes must be opened and the contents rearranged after the merchandise is imported, said CIT as it sustained a 2014 Commerce Department scope ruling on DistriCargo’s exhibition booth kits (see 14081801).
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According to CIT, DistriCargo imported the components, including aluminum poles and beams and iron buckles, together in the same shipment and entry but grouped by type of part. After importation, a distributor unpacks the parts and rearranges them into kits that suit the needs of end users that rent them from the distributor. The finished goods kit exemption applies to a “packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good.” Though Commerce has found kits may be contained in separate packages and still qualify, it “reasonably concluded” here that DistriCargo’s exhibition booths are not finished goods kits because the parts are stored as both kit parts in the distributor’s inventory, and not combined to form a full kit at the time of importation.
DistriCargo said Commerce had no evidence that the parts were rearranged and repackaged after importation, but CIT ruled the burden falls on DistriCargo to prove the merchandise is ready for use as a kit when imported. DistriCargo did not show the “components required to assemble a booth are arranged together in the shipping container or marked in a way that communicates each box belongs to an individual kit,” said CIT. Nor did it clarify whether the distributor mixes like components in its inventory, “rearranging and repackaging the components before assembling each booth to fit renters’ requests,” it said.
(DistriCargo, Inc. v. U.S., Slip Op. 16-38, CIT # 14-00208, dated 04/20/16, Judge Gordon)